THE ORIGINS OF ENDOGENOUS GROWTH

This paper describes two strands of work that converged under the heading of 'endogenous growth.' One strand, which is primarily empirical, asks whether there is a general tendency for poor countries to catch up with rich countries. The other strand, which is primarily theoretical, asks what modifications are necessary to construct a theory of aggregate growth that takes the economics of discovery, innovation, and technological change seriously. The paper argues that the second strand of work will ultimately have a more significant impact on our understanding of growth and our approach to aggregate theory.