The discussion of economic growth has had a long history, going back to the classical economists. The intensity of the discussion has varied over the years, and it has been amplified over the last two decades. This growing interest can be attributed to two main reasons: First, the concern with the persistent gap in the standard of living across countries, and second, the appearance of new insights into old problems. In this paper we take a broad overview of the field, and outline an approach that is consistent with the data. By explanation of growth we mean an explicit framework that can be confronted with the data and hopefully be validated.

To set up the background for our discussion we begin with a summary of the evidence followed by an incomplete review of the literature to illustrate the efforts of confronting the theory with the data. With this background, we review a more general framework with empirical orientation for the evaluation of the growth process. The essence of this approach is the recognition that the implemented technology and the level of inputs are jointly determined. Qualitative implications of this framework are presented and compared with the evidence. This is followed by an illustration of a cross-country analysis of the agricultural production function evaluated in terms of the given framework. Concluding remarks summarize the paper and some of the implications.