Endogenous Growth Theory

The best book so far on capitalism, markets, and growth—both a masterful assimilation of past work from Schumpeter to the 1960s and a guide to the recent work in which Aghion and Howitt are leaders.

Edmund S. Phelps, McVickar Professor of Political Economy, Columbia University

The theory of growth has made a great advance in recent years and Philippe Aghion and Peter W. Howitt have been leading the attack on the fronteirs. They have shown how the analysis of growth should be based on a clear and creative microeconomic understanding of the competitive forces behind innovation and accumulation. This is a most important book which must be read by all those interested in understanding how economis grow.

Professor Nicholas Stern, FBA, Chief Economist, European Bank for Reconstruction and Development

Aghion and Howitt have done a splendid job of integrating the dispersed material constituting what has come to be known as, 'endogenous growth theory.' They have joined aggregate models of the economy with a more detailed treatment of the economies of innovation than has been hitherto available. This synthesis, representing much that is original, will be the basis for rich future developments.

Professor Kenneth J. Arrow, Department of Economics, Stanford University

Everything that has been done in engogenous growth theory up to 1997 will be found in this book. The two authors are much taken by the Schumpeterian theory of creative destruction and have done sterling service in making it more precise and usable. But they do not neglect other theories and, indeed, cast their net widely to include questions of orginization of firms, incentive theory, and employment theory as they fitt into the understanding of growth. Nor are they indifferent to empirical evidence. Much of the analysis is in terms of steady states. One of the notable features of the book is that the limitations of this are fully discussed. Indeed the gap between manageable models and the world modelled is often noted. A spledid book which shows economics at its best.

Frank Hahn, University di Siena

This is not a routine textbook on modern growth theory. Aghion and Howitt take the Schumpeterian point of view seriously, and pursue it in a versatile and open-ended way. They may even do some creative destruction of their own. Anyone reading this book will come away with a lot of new ideas.

Professor Robert M. Solow, Massachusetts Institute of Technology, Department of Economics, Interdepartmental

Aghion and Howitt is a real breakthrough in growth economics. This book has profound implications and should be read by anyone who is serious about studying economic growth.

Nicholas Crafts, Department of Economic History, London School of Economics and Political Science