Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economic Research Unit (ERU-Kolkata)


Gupta, Manash Ranjan (ERU-Kolkata; ISI)

Abstract (Summary of the Work)

Modern GrowthTheory Countries with high per capita real GDP are usually associated with higher standard of living of its citizens. In fact, the greater the aggregate Pie grows into, it becomes easier for the government to subsidize people of the bottom section of income distribution. As a result, the theory of economic growth receives a great importance in the Economics literature. Economic growth rate is defined as the rate of increase in per capita real GDP over time; and a very small difference in growth rate may result into a huge difference in per capita real GDP in the long run due to its cumulative effect.The literature of neoclassical growth theory starts with Solow (1956) and Swan (1956). The key aspect of the Solow–Swan model is the use of neoclassical production function which satisfies constant returns to scale, diminishing returns to each input and substitutability between inputs. These models assume an exogenously given constant savings - output ratio and build extremely simple general equilibrium growth models. The key result of these models is that in the absence of technological progress, output per capita cannot grow forever and it converges to its steady state equilibrium value. The basic exogenous savings Solow – Swan model has been extended by various authors in various directions. Despite of the path breaking contribution, these models belong to the set of exogenous growth models because the steady state equilibrium growth rate of the economy in these models is exogenously given. Later Cass (1965) and Koopmans (1965) incorporate Ramsey’s analysis of consumers’ life time utility maximization behaviour in the neoclassical growth model dropping the assumption of constant savings rate. However, these extensions also fail to determine economic growth rate endogenously in the long run and thus belong to the set of exogenous growth models.A new wave in growth theory comes with works of Romer (1986), Lucas (1988) and Rebelo (1991) etc. In these models, the rate of economic growth is endogenous due to endogenous human capital accumulation. Other endogenous growth models are built by Arrow (1962), Sheshinski (1967) and Uzawa (1965) etc. Growth models of Arrow (1962) and Sheshinski (1967) are based on the concept of ‘learning by doing’ where the technological progress is a by-product of investment. Uzawa (1965) and Lucas (1988) focus on the effect of human capital accumulation on growth. Barro (1990) develops an endogenous growth model focusing on the role of tax financed productive public expenditure on capital accumulation.Romer (1987, 1990), Aghion and Howitt (1992) and Grossman and Helpman (1991) incorporate R&D theories and imperfect competition into the framework of endogenous economic growth. After these major contributions, role of various other aspects such as law and order, protection of intellectual property rights, international trade, financial markets, competition in market, imitation of new technology etc. on economic growth are also analysed in various models. Labour market imperfections caused by the presence of labour union and its bargaining power is one such factor affecting economic growth.


ProQuest Collection ID:

Control Number


Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.


Included in

Mathematics Commons