Introduction to Modern Economic Growth

Book Preface

This book is intended to serve two purposes. First and foremost, this is a book about economic growth and long-run economic development. The process of economic growth and the sources of differences in economic performance across nations are some of the most interesting, important, and challenging areas in modern social science. The primary purpose of this book is to introduce graduate students to these major questions and to the theoretical tools necessary for studying them. The book therefore strives to provide students with a strong background in dynamic economic  analysis, since only such a background will enable a serious study of economic growth and economic development. I also try to provide a clear discussion of the broad empirical patterns and historical processes underlying the current state of the world economy. This narrative is motivated by my belief that to understand why
some countries grow and others fail to do so, economists have to move beyond  themechanics of models and pose questions about the fundamental causes of economic growth.

Second, in a somewhat different capacity, this book is also a graduate-level introduction to modern macroeconomics and dynamic economic analysis. It is sometimes commented that, unlike basic microeconomic theory, there is no core of current macroeconomic theory that is shared by all economists. This is not entirely true. While there is disagreement among macroeconomists about how to approach short-run macroeconomic phenomena and what the boundaries of macroeconomics should be, there is broad agreement about the workhorse models of dynamic macroeconomic analysis. These include the Solow growth model, the neoclassical growth model, the overlapping generations model, and models of technological change and technology adoption. Since these are all models of economic growth, a thorough treatment of modern economic growth can also provide (and perhaps should provide) an introduction to this core material of modern macroeconomics. Although there are several good graduate-level macroeconomic textbooks, they typically spend relatively little time on the basic core material and do not develop the links between modern macroeconomic analysis and economic dynamics on the one hand and general equilibrium theory on the other. In contrast, the current book does not cover any of the short-run topics in macroeconomics, but provides a thorough and rigorous introduction to what I view to be the core of macroeconomics.