National Policies and Economic Growth: A Reappraisal

NYU Development Research Working Paper No. 1

70 Pages Posted: 28 Feb 2004

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Date Written: February 2004

Abstract

The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects of national policies, pointing out that such effects are inconsistent with several stylized facts and seem to depend on extreme observations in growth regressions. More modest effects of policy are consistent with theoretical models that feature substitutability between the formal and informal sector, have a large share for the informal sector, or stress technological change rather than factor accumulation.

Keywords: economic growth, economic development, national policies

JEL Classification: O10, O40, E60

Suggested Citation

Easterly, William, National Policies and Economic Growth: A Reappraisal (February 2004). NYU Development Research Working Paper No. 1. Available at SSRN: https://ssrn.com/abstract=507402 or http://dx.doi.org/10.2139/ssrn.507402

William Easterly (Contact Author)

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

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