Abstract
The revival of growth theory in the 1980s was originally stimulated by ‘technical progress within economics’— by the development of new tools for handling old ideas. The neoclassical models of the 1960s had already shown that growth in per capita income was sustainable only through the continual growth of technological knowledge. A so, it had long been understood that technological knowledge, like capital, grows only because people find it profitable to make it grow; research, development, study, experimentation and learning by doing all employ resources with alternative uses. The neoclassical model of Solow and Swan ignored these activities and treated technological growth as exogenous, not on grounds of realism but because there were no available techniques for incorporating them into standard economic analysis.
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Aghion, P., Howitt, P. (1998). A Schumpeterian Perspective on Growth and Competition. In: Coricelli, F., Matteo, M.d., Hahn, F. (eds) New Theories in Growth and Development. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-26270-0_2
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