Macroeconomics

Part Three, Growth Theory: The Economy in the Very Long Run

Part Three makes the classical analysis of the economy dynamic by developing

the tools of modern growth theory. Chapter 7 introduces the Solow growth

model as a description of how the economy evolves over time. This chapter

emphasizes the roles of capital accumulation and population growth. Chapter 8

then adds technological progress to the Solow model. It uses the model to dis-

cuss growth experiences around the world as well as public policies that influ-

ence the level and growth of the standard of living. Finally, Chapter 8 introduces

students to the modern theories of endogenous growth.