NEW THEORIES IN GROWTH AND DEVELOPMENT

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1 NEW THEORIES IN GROWTH AND DEVELOPMENT

2 New Theories in Growth and Development Edited by Fabrizio Coricelli Dipartimento di Economia Politica Universitii di Siena Massimo di Matteo Dipartimento di Economia Politica Universita di Siena and Frank Hahn Emeritus Professor of Economics University of Cambridge and Dipartimento di Economia Politica Universita di Siena

3 First published in Great Britain 1998 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN ISBN (ebook) DOI / First published in the United States of America 1998 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y ISBN Library of Congress Cataloging-in-Publication Data New theories in growth and development I edited by Fabrizio Coricelli, Massimo di Matteo and Frank Hahn. p. em. Includes bibliographical references and index. ISBN I. Economic development. I. Coricelli, Fabrizio. II. DiMatteo, Massimo. III. Hahn, Frank. HD7S.N DC CIP Selection, editorial matter and Chapter I Fabrizio Coricelli, Massimo di Matteo and Frank Hahn 1998 Chapters 2-11 Macmillan Press Ltd 1998 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources OS I

4 Contents List of Contributors vii Introduction Fabrizio Coricelli, Massimo di Matteo and Frank Hahn PART I THEORIES 2 A Schumpeterian Perspective on Growth and Competition 9 Philippe Aghion and Peter Howitt 3 Innovation and Growth: The Relationship between Short- and Long-term Properties of Processes of Economic Change 50 Mario Amendola and Jean Luc Gaffard 4 The 'New' Growth Theory: Old Wine in New Goatskins 63 Heinz D. Kurz and Neri Salvadori PART II GROWTH AND DEVELOPMENT 5 The Contributions of Endogenous Growth Theory to the Analysis of Development Problems: An Assessment 97 Pranab Bardhan 6 Development and Theories of Endogenous Growth Ill T. N. Srinivasan 7 Modern Economic (Endogenous) Growth and Development 155 Moshe Syrquin 8 Growth and Development Theories 175 Lance Taylor v

5 vi Contents PART III ECONOMIC POLICIES, THE ROLE OF THE STATE, AND GROWTH 9 Economic Policies, Economic Shocks and Economic Growili William Easterly 10 Growth, Debt and Economic Transformation: The Capital Flight Problem Guillermo A. Calvo 2n 251 I I Economic Growth under Alternative Development Strategies: Latin America from the 1940s to the 1990s 270 Andres Solimano Index 293

6 List of Contributors Philippe Aghion University College London and European Bank for Reconstruction and Development Mario Amendola University of Rome 'La Sopienza' Pranab Bardhan University of California, Berkeley Guillermo A. Calvo University of Maryland, College Park Fabrizio Coricelli University of Siena William Easterly The World Bank, Washington, DC Jean Luc Gaft'ard University of Nice Sophia-Antipolis Frank Hahn University of Cambridge and University of Siena Peter Howitt University of Western Ontario Heinz D. Kurz University of Graz Massimo di Matteo University of Siena Neri Salvadori University of Pisa Andres Solimano The World Bank, Washington, DC T. N. Srinivasan Yale University Moshe Syrquin The World Bank, Washington, DC Lance Taylor New School for Social Research, New York

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