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New Growth Theory: A Survey from a Policy Perspective

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  2. Economics, Finance, Business & Management
  3. Credit and Capital Markets – Kredit und Kapital
  4. Vol. 28, Issue 1
  5. pp. 62–86

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Fratianni, M., Huang, H. New Growth Theory: A Survey from a Policy Perspective. Credit and Capital Markets – Kredit und Kapital, 28(1), 62-86. https://doi.org/10.3790/ccm.28.1.62
Fratianni, Michele and Huang, Haizhou "New Growth Theory: A Survey from a Policy Perspective" Credit and Capital Markets – Kredit und Kapital 28.1, 1995, 62-86. https://doi.org/10.3790/ccm.28.1.62
Fratianni, Michele/Huang, Haizhou (1995): New Growth Theory: A Survey from a Policy Perspective, in: Credit and Capital Markets – Kredit und Kapital, vol. 28, iss. 1, 62-86, [online] https://doi.org/10.3790/ccm.28.1.62
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New Growth Theory: A Survey from a Policy Perspective

Fratianni, Michele | Huang, Haizhou

Credit and Capital Markets – Kredit und Kapital, Vol. 28 (1995), Iss. 1 : pp. 62–86

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.28.1.62
Language
Multiple languages
Pages
25

Author Details

Michele Fratianni, Bloomington

Haizhou Huang, Bloomington

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Abstract

New Growth Theory: A Survey from a Policy Perspective

The main message of the new growth theory is that economic growth cannot be simply explained by capital accumulation. Technological improvements, new products, and human capital are the endogenous forces that this literature emphasizes. Public policy plays a big role in economic growth. The most pro-growth strategy is the one that does not stifle the accumulation of physical and human capital. Yet, there are many governments which continue to favor consumption at the expense of saving and investment. Public policy can also foster growth by promoting openness. Enrichment in human capital occurs through education, training, innovation and imitation. A good example of how these factors interact is Silicon Valley in the United States, where a core industry attracts people with high human capital. This pool of labor becomes a positive externality for other industries that desire to locate next to the core industry. The high-tech industrial park rewards new entrants as well as those who invest in additional human capital.

Table of Contents

Section Title Page Action Price
Michele Fratianni/Haizhou Huang: New Growth Theory:\rA Survey from a Policy Perspective 62
I. Stylized facts and neoclassical growth theory 63
II. New growth theory 68
1. Spillovers and human capital 68
2. Labor specialization 70
3. Constant returns to scale to composite capital 71
4. Endogenous growth and international trade 71
5. Recent empirical evidence 74
III. Strategies for economic growth 76
1. Macroeconomic implications 77
2. Microeconomic implications 80
IV. Conclusions 82
References 82
Summary: New Growth Theory: A Survey from a Policy Perspective 85
Zusammenfassung: Neue Wachstumstheorie: Überblick aus politischer Perspektive 86
Résumé: Nouvelle théorie de la croissance - une étude dans une perspective politique 86

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