Abstract
The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects of national policies, pointing out that such effects are inconsistent with several stylized facts and seem to depend on extreme observations in growth regressions. More modest effects of policy are consistent with theoretical models that feature substitutability between the formal and informal sector, have a large share for the informal sector, or stress technological change rather than factor accumulation.
| Original language | English (US) |
|---|---|
| Title of host publication | Handbook of Economic Growth |
| Pages | 1015-1059 |
| Number of pages | 45 |
| Volume | 1 |
| Edition | SUPPL. PART A |
| DOIs | |
| State | Published - 2005 |
Publication series
| Name | Handbook of Economic Growth |
|---|---|
| Number | SUPPL. PART A |
| Volume | 1 |
| ISSN (Print) | 15740684 |
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Keywords
- economic development
- economic growth
- economic reform
- international trade
- macroeconomic policies
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Chapter 15 National Policies and Economic Growth : A Reappraisal. / Easterly, William.
Handbook of Economic Growth. Vol. 1 SUPPL. PART A. ed. 2005. p. 1015-1059 (Handbook of Economic Growth; Vol. 1, No. SUPPL. PART A).Research output: Chapter in Book/Report/Conference proceeding › Chapter
}
TY - CHAP
T1 - Chapter 15 National Policies and Economic Growth
T2 - A Reappraisal
AU - Easterly, William
PY - 2005
Y1 - 2005
N2 - The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects of national policies, pointing out that such effects are inconsistent with several stylized facts and seem to depend on extreme observations in growth regressions. More modest effects of policy are consistent with theoretical models that feature substitutability between the formal and informal sector, have a large share for the informal sector, or stress technological change rather than factor accumulation.
AB - The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects of national policies, pointing out that such effects are inconsistent with several stylized facts and seem to depend on extreme observations in growth regressions. More modest effects of policy are consistent with theoretical models that feature substitutability between the formal and informal sector, have a large share for the informal sector, or stress technological change rather than factor accumulation.
KW - economic development
KW - economic growth
KW - economic reform
KW - international trade
KW - macroeconomic policies
UR - http://www.scopus.com/inward/record.url?scp=66049087363&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=66049087363&partnerID=8YFLogxK
U2 - 10.1016/S1574-0684(05)01015-4
DO - 10.1016/S1574-0684(05)01015-4
M3 - Chapter
AN - SCOPUS:66049087363
SN - 9780444520418
VL - 1
T3 - Handbook of Economic Growth
SP - 1015
EP - 1059
BT - Handbook of Economic Growth
ER -