Economic growth: A review essay

The last decade has seen an explosion of research on economic growth. Based on a selective review of this literature and the recent book on Economic Growth by Robert Barro and Xavier Sala-i-Martin, we see four main challenges for future research. First, to more tightly link theory and evidence. We think a good way of achieving this would be to follow the methodology common in the business cycle literature of simulating models to compare their predictions to the data. Second, to develop new ways to empirically distinguish between competing theories of endogenous growth. Third, to develop more theories of international productivity differences. Finally, to collect detailed country data bearing on the process of technology diffusion.