ABSTRACT
The basic idea is that an economy has a real potential output level at full employment that depends upon the existence of basic inputs into production and the efficiency with which those inputs can be combined to produce output. Economic growth is central to the entire discipline of economics. Adam Smith thought about it deeply in the book that many consider the founding document of economics, An Inquiry into the Nature and Causes of the Wealth of Nations. Modern analysis of economic growth began after World War II when the field of economic development was founded. Robert Solow is the most prominent contributor to the theory of economic growth, and he received the Nobel Prize for this work in 1987. A major puzzle arose when the rate of growth for the United States, which had been 2.5 percent per year from 1948 to 1973, fell to just 0.7 percent per year from 1973 to 1989.
