ABSTRACT
The search for logically sound and convincing explanations of whyeconomic growth is closely correlated with international tradenecessarily takes us into the field of economic growth. This field of economics has been very active in the last two decades, and with the help of two centuries of accumulated economic thought economists now have a good understanding of the process of economic growth. Most important, we have insightful models of the process of technological change. This chapter makes it clear why these latter models are so important: technological progress is the fundamental driving force of long-run economic growth.
