Handbook of Economic Growth - 1st Edition - ISBN: 9780444535467, 9780444535474

Handbook of Economic Growth, Volume 2

1st Edition

Editors: Philippe Aghion Steven Durlauf
Hardcover ISBN: 9780444535467
eBook ISBN: 9780444535474
Imprint: North Holland
Published Date: 10th December 2013
Page Count: 1176
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Volumes 2A and 2B of The Handbook of Economic Growth summarize recent advances in theoretical and empirical work while offering new perspectives on a range of growth mechanisms, from the roles played by institutions and organizations to the ways factors beyond capital accumulation and technological change can affect growth. Written by research leaders, the chapters summarize and evaluate recent advances while explaining where further research might be profitable. With analyses that are provocative and controversial because they are so directly relevant to public policy and private decision-making, these two volumes uphold the standard for excellence in applied economics set by Volumes 1A and 1B (2005).

Key Features

  • Offers definitive theoretical and empirical scholarship about growth economics
  • Empowers readers to evaluate the work of other economists and to plan their own research projects
  • Demonstrates the value of empirical testing, with its implicit conclusion that our understanding of economic growth will help everyone make better decisions


Graduate students and professors worldwide working in all subdisciplines of economics.

Table of Contents


Chapter 1. Culture, Entrepreneurship, and Growth


1.1 Introduction

1.2 A Framework for Analyzing the Interaction of Cultural Preferences, Entrepreneurship, and Growth

1.3 Endogenous Culture I: Weber and the Transmission of Patience

1.4 Endogenous Culture II: Knight and the Transmission of Risk Tolerance

1.5 Paternalistic Motives for Preference Transmission

1.6 Literature Review

1.7 Outlook and Conclusions


A Proofs of Propositions and Lemmas


Chapter 2. Trust, Growth, and Well-Being: New Evidence and Policy Implications


2.1 Introduction

2.2 Theoretical Foundations

2.3 Empirical Measures of Trust

2.4 The Dynamics of Trust

2.5 Trust, Income Per Capita, and Growth

2.6 Channels of Influence of Trust on Economic Outcomes

2.7 Institutions, Policies, and Trust

2.8 Future Avenues: Trust and Well-Being



Chapter 3. Long-Term Barriers to Economic Development


3.1 Introduction

3.2 A Theory of Relatedness and Growth

3.3 Empirical Methodology and Data

3.4 Barriers to Development: Empirical Results

3.5 Ancestry and Long-Run Development

3.6 Conclusion

APPENDIX 1 Technologies Used in the Various Datasets


Chapter 4. Family Ties


4.1 Introduction

4.2 Literature Review

4.3 Conceptual Framework

4.4 How to Measure Family Ties

4.5 Where Family Ties Come From

4.6 Empirical Analysis

4.7 Family Ties, Development, and Institutions

4.8 Family Ties and Well-being

4.9 Conclusion



Chapter 5. The Industrial Revolution


5.1 Introduction

5.2 Theories of the Industrial Revolution

5.3 Changes in People

5.4 Technological Change Before the Industrial Revolution

5.5 Conclusion


Chapter 6. Twentieth Century Growth


6.1 Introduction

6.2 Setting the Stage

6.3 Twentieth century growth: What Happened?

6.4 The Proximate Sources of Growth

6.5 Growth in the Leader: The United States

6.6 The Economic Historian’s View of Catch-Up

6.7 Case Studies I: Initial Success, Subsequent Disappointment

6.8 Case Studies II: Success, At Least for Now

6.9 Case Studies III: Failures

6.10 Conclusions


Chapter 7. Historical Development


7.1 Introduction

7.2 European Colonial Rule

7.3 Other Important Historical Events

7.4 Geography and History

7.5 Mechanisms Underlying Historical Persistence

7.6 Unresolved Questions And Directions for Future Research

7.7 Conclusions: Looking Back while Moving Forward



Chapter 8. Institutions and Economic Growth in Historical Perspective


8.1 Introduction

8.2 Lesson 1: Public-Order Institutions are Necessary for Markets to Function

8.3 Lesson 2: Strong Parliaments do not Guarantee Economic Success

8.4 Lesson 3: The Key Distinction Is Between Generalized and Particularized Institutions

8.5 Lesson 4: Property Rights Institutions and Contracting Institutions Both Matter, and are not Separable

8.6 Lesson 5: Property Rights are More Likely to be Beneficial for Growth if they are Generalized Rather than Particularized

8.7 Lesson 6: Security of Private Property Rights is a Matter of Degree (and Needs Careful Analysis)

8.8 Lesson 7. Institutions are Embedded in a Wider Institutional System

8.9 Lesson 8: Distributional Conflicts are Central

8.10 Illustration of the Lessons: Serfdom and Growth

8.11 Conclusion



Chapter 1. What Do We Learn From Schumpeterian Growth Theory?


1.1 Introduction

1.2 Schumpeterian Growth: Basic Model

1.3 Growth Meets IO

1.4 Schumpeterian Growth and Firm Dynamics

1.5 Growth Meets Development

1.6 Schumpeterian Waves

1.7 Conclusion



Chapter 2. Technology Diffusion: Measurement, Causes, and Consequences


2.1 Introduction

2.2 Measurement

2.3 Drivers of Technology Adoption

2.4 Effects of Technology Adoption

2.5 Concluding Remarks

A Description of Technologies used to Estimate Diffusion Curves

B Additional Tables


Chapter 3. Health and Economic Growth


3.1 Introduction

3.2 Facts

3.3 Interaction of Health and Income: A theoretical Framework

3.4 Impact of Income on Health

3.5 Impact of Health on Economic Growth

3.6 Health as a Component of Economic Growth

3.7 Conclusion



Chapter 4. Regional Growth and Regional Decline


4.1 Introduction

4.2 Convergence, Divergence, Polarization

4.3 Do Regional Disparities Matter?

4.4 Models of Regional Prosperity

4.5 Geography and Growth

4.6 Regional Prosperity: Data and Methods

4.7 What Determines Regional Prosperity?

4.8 Regional Decline

4.9 Conclusions

4.10 Appendix: Data and Methods



Chapter 5. The Growth of Cities


5.1 Introduction

5.2 Land Use and Transportation

5.3 Housing

5.4 Urban Amenities

5.5 Agglomeration Economies

5.6 Human Capital and Entrepreneurship

5.7 Random Urban Growth

5.8 Conclusion



Chapter 6. Growth and Structural Transformation


6.1 Introduction

6.2 The Stylized Facts of Structural Transformation

6.3 Modeling Structural Transformation and Growth

6.4 The Economic Forces Behind Structural Transformation: Theoretical Analysis

6.5 The Economic Forces Behind Structural Transformation: Empirical Analysis

6.6 Extensions of the Benchmark Model

6.7 Applications of Structural Transformation

6.8 Conclusion


Appendix A Data Sources and Sector Assignments

Appendix B Panel Regressions


Chapter 7. The Chinese Growth Miracle


7.1 Introduction

7.2 Economic Growth in China: Achievements and Features

7.3 The Economics of the Miracle

7.4 The Political Economy of the Miracle

7.5 Explaining China’s Export-led Growth Model

7.6 Domestic and Global Imbalances

7.7 Inequality and the Middle-income Trap

7.8 Conclusions



Chapter 8. Growth from Globalization? A View from the Very Long Run


8.1 Introduction

8.2 Measuring “Globalization”

8.3 Channels: The Theoretical Links between Globalization and Growth

8.4 Globalization and History: From Antiquity to the 18th Century

8.5 Globalization and the British Industrial Revolution

8.6 Globalization and the International Diffusion of the Industrial Revolution: 1820–1913

8.7 Cross-Country Comparative Evidence from the Late 19th Century

8.8 Globalization and the Great Divergence: The Periphery Falls Behind

8.9 Conclusions



Author Index

Subject Index


No. of pages:
© North Holland 2014
North Holland
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About the Editor

Philippe Aghion

Affiliations and Expertise

Harvard University, Cambridge, MA, USA

Steven Durlauf

Stephen Durlauf is Kenneth J. Arrow Professor of Economics, Laurents R. Christensen Professor of Economics, and Vilas Professor at the University of Wisconsin, Madison. He is a Fellow in the Econometric Society and in the American Academy of Arts and Sciences.

Affiliations and Expertise

University of Wisconsin at Madison, WI, USA


"Volume 2 is as splendid in its breadth as Volume 1 was admirable in its depth. The excitement, richness, and creativity of the field of economic growth could not have been conveyed more brilliantly."  --Francesco Caselli, London School of Economics

"The literature on economic growth remains as vibrant as ever! Aghion and Durlauf have assembled a great collection of papers testifying to this truth, on topics including the Industrial Revolution, the role of institutions, the interplay between health and growth, globalization, and the stunning growth of China."  --Chad Jones, Stanford University

"An indispensable overview of inspiring recent developments in the field of economic growth, underlying the long shadow of history in comparative economic development." --Oded Galor, Brown University

"We have come to know through the experience of many countries over decades that growth is complex and multi-dimensional.  Volume 2 of the Handbook of Economic Growth is a very useful and comprehensive assessment of our knowledge of growth and its determinants.  By viewing growth through multiple lenses, it  admirably captures the richness of the subject."  --Michael Spence, New York University

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