Description:
This survey of recent literature on endogenous growth highlights some of the modeling choices in endogenous growth theory, which are constrained by certain formal requirements on the one hand and by the need for convincing economic interpretations on the other. The formal requirements are examined in section 1. Some possible economic sources of endogenous growth are discussed in section 2. Section 3 summarizes recent findings about endogenous innovation in open economies. Section 4, finally, focuses on multiple equilibria and path dependence, implications of increasing returns and non-convexities which cannot be accommodated in conventional growth modeis, and which seem to call for a fundamental rethinking of growth policies.