The Evolution of Growth and Development Theory 1940

The Evolution of Growth and Development Theory 1940 -2019

1940’s • Domar – Harrod-Domar growth model – GDP growth is proportional to share of investment – dy/y = s/v – Y = min (K, L) • Rosenstein-Rodan – big push (1943)

1950’s • Hirshman – coordination failure • Kaldor – different savings rates • Lewis – two-sector – 4 Big assumptions • Solow – growth model – Introduces factor substitution – Sy=nk and Y = A(k)

1960’s • Rostow – stages of growth • T. W. Schultz – Quality of People

1970’s • Chenery and Kuznets – “structural change” – Patterns of development • Irma Adelman – basic needs – Food, shelter, health, education • Dependence (False-paradigm) – Political economy, legacy of colonialism

1980’s • Neoclassical revolution – Anne O. Krueger – ”free markets” • Lucas and Romer – endogenous growth – Level of technology is now in the model – Increasing returns – Importance of Ideas

1990’s • Sen - freedom • Kremer – O-ring • Behavioral Economics

2000’s • • Sachs – Big Push revisited and Clinical Rodrik – growth analytics, institutions Duflo – RCTs, Poor Economics Ostrom – Beyond Markets and States • 2009 Nobel • Acemoglu – History and Institutions

2010 s • Sachs – SDGs • Neuro. Economics