Chapter 15 National Policies and Economic Growth: A Reappraisal

William Easterly

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects of national policies, pointing out that such effects are inconsistent with several stylized facts and seem to depend on extreme observations in growth regressions. More modest effects of policy are consistent with theoretical models that feature substitutability between the formal and informal sector, have a large share for the informal sector, or stress technological change rather than factor accumulation.

    Original languageEnglish (US)
    Title of host publicationHandbook of Economic Growth
    EditorsPhilippe Aghion, Steven Durlauf
    Pages1015-1059
    Number of pages45
    EditionSUPPL. PART A
    DOIs
    StatePublished - 2005

    Publication series

    NameHandbook of Economic Growth
    NumberSUPPL. PART A
    Volume1
    ISSN (Print)1574-0684

    Keywords

    • economic development
    • economic growth
    • economic reform
    • international trade
    • macroeconomic policies

    ASJC Scopus subject areas

    • Economics and Econometrics

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  • Cite this

    Easterly, W. (2005). Chapter 15 National Policies and Economic Growth: A Reappraisal. In P. Aghion, & S. Durlauf (Eds.), Handbook of Economic Growth (SUPPL. PART A ed., pp. 1015-1059). (Handbook of Economic Growth; Vol. 1, No. SUPPL. PART A). https://doi.org/10.1016/S1574-0684(05)01015-4