Theory of Economic Growth

  • Matthieu Cristelli
Part of the Springer Theses book series (Springer Theses)


The economic theories developed in the last two centuries to explain country growth are mainly influenced by the paradigm introduced by Adam Smith theory [1]. According to Adam Smith [1] the wealth and the richness of a country are linked to division of labour. We can say that he supported the idea that the economic efficiency is proportional to the specialization. The more a country is specialized in a productive sector, the more this country can be efficient in that production. The consequence of such an equation between specialization and efficiency is that the development and the total wealth of countries increase as the the specialization increases. However, the degree of specialization that can be reached by the global market is intimately limited by the the size of the market itself. The second consequence of Adam Smith’s theory is that market with increasing size would produce an increase in the total wealth of countries since a deeper degree of specialization is reachable. In Adam Smith’s theory the increasing wealth of the nations derives from the emergence of new activities (specialization) and the interaction between them at all scales. Both ingredients increase the economic complexity of the productive system of countries and according to Adam Smith the nations’ wealth too.


  1. 1.
    Smith, A. (1776). The wealth of nations. London: W. Strahan and T. Cadell.Google Scholar
  2. 2.
    Hidaldo, C. A., & Hausmann, R. (2008). A network view of economic development. Developing Alternatives, 12(2008), 5.Google Scholar
  3. 3.
    Flam, H., & Flanders, M. (1991). Heckscher-Ohlin trade theory. Cambridge, Mass.: MIT Press.Google Scholar
  4. 4.
    Romer, P. (1990). Endogenous technological change. Journal of Political Economy, 98, 71.CrossRefGoogle Scholar
  5. 5.
    Aghion, P., & Howitt, P. (1992). Endogenous technological change. Econometrica, 60, 323.MATHCrossRefGoogle Scholar
  6. 6.
    Grossman, G. M., & Helpman, E. (1990). Quality ladders in the theory of growth. Review of Economic Studies, 98, 71.Google Scholar
  7. 7.
    Rosenstein-Rodan, P. (1943). Problems of industrialization of eastern and south eastern europe. Economic Journal, 53, 202.CrossRefGoogle Scholar
  8. 8.
    Hirschman, A. O. (1958). The strategy of economic development. New Haven: Yale University Press.Google Scholar
  9. 9.
    Matsuyama, K. (1992). Agricultural productivity, comparative advantage, and economic growth. Journal of Economic Theory, 58, 317.MATHCrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  1. 1.ISC-CNR, Istituto dei Sistemi Complessi, Department of Physics, “Sapienza”Università di RomaRomeItaly

Personalised recommendations