Learning from "Learning by Doing": Lessons for Economic Growth

Author: Robert M. Solow
List Price: $17.95
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ISBN: 0804728410
Publisher: Stanford Univ Pr (April, 1997)
Sales Rank: 128,368
Average Customer Rating: 5 out of 5

Customer Reviews

Rating: 5 out of 5
Classical subject, new contribution
Noble Laureate Robert M. Solow has for decades been regarded as a leader in the field of macroeconomic theory, specifically on the subject of economic growth. Thus, his latest contribution to this growing area of economic study represented an important publication.

And Solow doesn't fail to come through. His work is concise, and approachable for those with a strong undergraduate background in economic theory. He uses a fair amount of calculus to elucidate his points, and familiarity with Monte Carlo simulations is essential.

The book's conclusion is not revolutionary; that savings and investment are critical to growth and that countries with a good head start will tend to continue to outperform countries who are behind, ceterus paribus. But his discussion of continuous improvment (as opposed to discrete innovation) is valuable, as is his reassertion that growth remains, in many senses, a stochastic process. Solow refutes new growth theory (NGT) on the grounds that it lacks rigor and is overly dependent upon unrealistic assumptions. He claims that Arrow foresaw NGT, but opted not to pursue it for this very reason.

In any case, Solow's book is a well-conceived piece of economic theory that reminds of the limitations of economic modelling and of the importance to temper our assessments with the reality of an imperfect world. For everyone interested in economic growth in the next century, this is an important piece of work which ought to be required reading for university courses, as well as for professionals shaping policy today.

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