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Endogenous Growth or “Big Bang”: Two views of the First Industrial Revolution

Published online by Cambridge University Press:  03 March 2009

David Greasley
Affiliation:
Reader in Economic History, Department of Economic History, 50 George Square, University of Edinburgh, Edinburgh EH8 9JY, Scotland.
Les Oxley
Affiliation:
Professor of Economics, Department of Economics, University of Waikato, New Zealand.

Extract

The return of growth theory to center stage in mainstream economics provides opportunities for historians to reconsider the forces shaping longer-term economic development. A key motivation for developing new growth modeling strategies lay in the desire to reestablish contact between theory and the empirics of economic growth. By postulating diminishing returns to capital, the traditional neoclassical paradigm precludes the sustaining of per capita growth in the absence of exogenous technological progress. Since historical records of economic development offer scant evidence for declining per capita growth, disenchantment grew with a theoretical perspective that leaves the crucial part of the empirical record unexplained, prompting a search for alternative modeling strategies.

Type
Articles
Copyright
Copyright © The Economic History Association 1997

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