| Abstract: | This paper identifies and interprets the six essential steps in the development of neoclassical growth theory from the Solow–Swan model to the new growth theory models of sustained endogenous growth driven by learning (e.g., [Romer, P., 1990. Endogenous technological change. Journal of Political Economy, 98 (5): S71–S102]). The success of that modeling exercise is based on the specification of selected assumptions about learning in industry. The practical shortcomings of the exercise are highlighted by the various and conflicting policy implications arising from the selection of attributes. It is concluded that better policies may follow from basing assumptions of learning behavior on the understanding of the process and strategy of learning that is emerging from institutional and evolutionary work. |
