ABSTRACT
Our concern in this chapter is one such case: the so-called theory of ‘endogenous’ growth. The idea underlying that theory took off in the mid-1980s and has experienced a remarkable boom since, reflected in a formidable industry of theoretical and empirical research on economic growth. Also described as ‘new’ growth theory (NGT) to indicate the claim to orginality, some advocates (see e.g. Grossman and Helpman, 1994, p. 42), are quite explicit in their view that NGT will revolutionize the way economists think about certain problems. They also claim that the revolution will not be peripheral to economic analysis but will affect its core. In their view, NGT is a basic innovation in the way economists theorize that will leave its mark on virtually every aspect of analytical economics. Whilst other authors are more cautious in their claims, there appears to be widespread agreement in the profession that the contributions of the NGT are both novel and important. This assessment should be sufficient for the historian of economic thought to delve more deeply into the matter and confront the scope, method, content and results of the ‘new’ growth models (NGMs) with earlier attempts at explaining economic growth.
