Economic Growth in an Open Developing Economy
Show Less

Economic Growth in an Open Developing Economy

The Role of Structure and Demand

A. P. Thirlwall

This concise yet insightful sequel to the highly acclaimed The Nature of Economic Growth provides a comprehensive critique of both old and new growth theory, highlighting the importance of economic growth for reducing poverty.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 3: A critique of orthodox growth theory: structure and demand matter for economic growth

The Role of Structure and Demand

A. P. Thirlwall


In the previous chapter we laid out the foundations of orthodox growth theory, that started with the Harrod model in 1939, which led subsequently to the 1956 Solow model of neoclassical growth theory, and then on to so-called ‘new’ (or endogenous) growth theory in the 1980s. This is the orthodoxy that is taught in university departments of economics all over the world. But the assumptions of the basic orthodox neoclassical model, and its predictions, bear little relation to reality. There are so many objections and criticisms that can be made of the model that it has always been a mystery to me how the basic Solow model ever came to dominate the teaching of growth economics. It probably needs a social science psychologist to explain. I shall mention briefly just a few of the major criticisms now, and then develop others more fully later.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.