GROWTH THEORY
Stefano Bosi
26 August 2010
Growth Theory

Professor Bosi’s lecture began with an overview of growth accounting. This included a series of stylized facts, including (among others) that there is:

• Large variation in GDP per capita across economies;
• Large variation of economic growth rates across countries;
• Growth rates change over time;
• Countries relative positions in the world distribution of GDP per capita vary over time, etc.

Next exogenous savings rates were canvassed, beginning with exogenous growth via the Solow Swan model.

Endogenous growth was considered then, including an endogenous savings rate assumption. Endogenous growth was considered via the Ramsey, AK and Romer models. The lecture concluded with a discussion of market imperfections, such as positive and negative externalities.