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The History Augmented Solow model

Autor: Carl-Johan Dalgaard and Holger Strulik
Nummer: 460, Nov 2010, pp. 22
JEL-Class: O11, O57

Abstract:
Unified growth theory predicts that the timing of the fertility transition is a key determinant of contemporary comparative development, as it marks the onset of the take-off to sustained growth. Neoclassical growth theory presupposes a take-off, and explains comparative development by variations in (subsequent) investment rates. The present analysis integrates these two perspectives empirically, and shows that they together constitute a powerful predictive tool vis-a-vis contemporary income differences.

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