Contents

Abstract 1372

Keywords 1372

1. Introduction 1373

2. A theory of economic development 1376

2.1. Classicaltheory: the pre-1700 era 1377

2.1.1. Technology 1379

2.1.2.

2.1.3. Endowments 1381

2.1.4. Population dynamics 1381

2.1.5. Equilibrium properties 1381

2.2. Modern growth theory: the post-1900 era 1382

2.3. The combined theory 1383

3. A theory of relative efficiencies 1389

3.1. The aggregate production function 1391

3.2. Consequencesofconstraintsforaggregateefficiency 1392

3.3. Estimatesofaggregaterelativeefficiency 1394

3.4. Reasons for constraints 1395

4. A unified theory of the evolution of international incomes 1396

4.1. Delays in starting dates 1397

4.2. No catch-up after the transition in many countries 1400

4.3. Catch-up and growth miracles 1403

4.4. Unmeasured investment 1406

Handbook of Economic Growth, Volume 1B. Edited by Philippe Aghion and Steven N. Durlauf © 2005 Elsevier B.V. All rights reserved

DOI: 10.1016∕S1574-0684(05)01021-X

5. Catchingup 1407

5.1. Catch-up facts 1407

5.2. Reasonsforcatchingupornotcatchingup 1408

5.2.1. TheUnitedStates 1408

5.2.2. Western Europe 1409

5.2.3. Latin America 1411

5.2.4. Southeast Asia 1412

5.2.5. China 1412

5.2.6. Russia 1412

6. Concludingremarks 1413

Acknowledgements 1414

References 1414