Productivity and growth, 1923-2003

Abstract

Productivity growth is a key determinant of an economy's long-run growth prospects. In Solow's neoclassical growth model, the source of long-run growth is given by the rate of exogenous technological progress. Endogenous growth theories attribute long-run growth to increasing returns that arise within the model. These may derive from a broad measure of capital as in Romer (1986) or from human capital as in Lucas (1988).