15 Years of New Growth Economics: What Have We Learnt?

Abstract

Paul Romer’s paper Increasing Returns and Long Run Growth, now 15 years old, led to resurgence in the research on economic growth. Since then, growth literature has expanded dramatically and has shifted the research focus of many generations of macroeconomists. The new line of work has emphasized the role of human capital, social and political variables, as well as the importance of institutions as driving forces of long-run economic growth. This paper presents an insight into the theoretical and empirical literature of the past fifteen years, highlighting the most significant contributions for our understanding of economics.