Following solow 1956 we can decompose the growth in

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Unformatted text preview: . Following Solow (1956) we can decompose the growth in income per-capita into these components. But as North and Thomas (1973, p. 2) put it: “the factors we have listed (innovation, economies of scale, education, capital accumulation etc.) are not causes of growth; they are growth.” (italics in original). James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2009 September Historical Analysis 10 / 19 Proximate and Fundamental The distinction between proximate and fundamental is rhetorical, but it is an attempt to focus on more satisfactory sources of variation and empirical strategies. Saying that one country is more prosperous than another because it has more capital or higher TFP may be correct, but it also may not be very insightful. Why do some countries save more; invest more resources in educational systems; or have better technology? Perhaps central planning of the economy was not good for the e¢ cient allocation of resources (low TFP), but then why did things get done thi...
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This document was uploaded on 02/28/2014 for the course ECON 2328 at Harvard.

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