Economic Growth and the Structure of Long-Term Development.

• Author: Gapinski, James H.

This volume contains the proceedings of a round table conference held by the International Economic Association in Varenna, Italy, during October of 1992. It includes 13 original essays organized into four parts having commentaries by individual reviewers and open discussions by all participants. Filling out the volume is a Part V of final evaluations by the coeditors and others. Indices of names and subjects are provided along with an introduction by Luigi Pasinetti and Robert Solow.

Part I is entitled "Empirical Evidence." Its three papers present facts of economic growth. However, they do more by volunteering a fair amount of analysis. Moshe Syrquin looks at structural transformation and new growth theory and stresses the relevancy of new growth to development issues. Ross Levine and Sara Zervos examine the policy determinants of growth. An especially exciting piece comes from Dan Ben-David. It lucidly shows the connection between the liberalization of trade and the reduced disparity of income across countries. In other words, it shows that trade causes convergence.

Part II, "Models of Long-Term Development," contains six essays and constitutes the lion's share of the volume. Continuing the idea pursued by Levine and Zervos in Part I, William Easterly, Robert King, Ross Levine, and Sergio Rebelo construct an endogenous growth model that supposedly enables a formal study of the effects of policy on growth. The study, however, proceeds in disappointingly inferential terms. Giuseppe Bertola delivers a masterful essay in which he compares old Cambridge growth theories with new growth theories. Paradoxically, he establishes that the two conceptions are similar though different.

Next in Part II is a chapter by Philippe Aghion and Peter Howitt, who bring a Schumpeterian approach to endogenous growth thinking. These authors indicate, albeit in sketchy fashion, how creative destruction can affect growth, and they reach the intuitively appealing conclusion that there can be too much growth. Extending the inquiry begun by Ben-David in the evidence section, Giovanni Dosi, Christopher Freeman, Silvia Fabiani, and Roberta Aversi focus on intercountry convergence and divergence of income. They first explore the facts, including those regarding trade, and highlight the widely divergent development patterns of the East Asian Tigers and countries of Latin America. They then advance a model whose simulations confirm divergence as the dominant pattern.

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