A central puzzle of growth theory is to account for sustained productivity increase in the face of diminishing returns. Aghion and Howitt describe, with great clarity and verve, the main explanations that growth theory has proposed: from denial of the reality of diminishing returns to capital to Schumpeterian creative destruction, with intervening stops for exogenous and endogenous technological progress. An industrious reader can end up poised at the current analytical frontier, prepared to think about open questions and new issues.
(Robert Solow, Department of Economics, MIT)
This text is both a clear and a concise survey of several approaches in the study of economic growth and an excellent introduction to the authors' impressive extensions of the Schumpeterian approach to market innovation and innovation policy.
(Edmund S. Phelps
, Director, Center on Capitalism and Society, Columbia University, and Winner of the 2006 Nobel Prize in Economics)
About the Author
Philippe Aghion is Robert C. Waggoner Professor of Economics at Harvard University. Aghion is coauthor (with Peter Howitt) of Endogenous Growth Theory
(MIT Press, 1997).
Peter Howitt is Lyn Crost Professor of Social Sciences at Brown University. Howitt is coauthor (with Philippe Aghion) of Endogenous Growth Theor
y (MIT Press, 1997).