The New Growth Evidence.

According to the definition used by the World Bank's 1996 World Development Report, over 4.5 billion of the world's 5.6 billion people live in developing countries, and so a better understanding of what generates economic growth could make a huge contribution to human welfare. Thus, the article tends to study various aspects of growth at aggregate level. The article explains the original 1950s-style neoclassical models. It examines why this crucial area of economic investigation is regarded with such widespread distrust. The focus of the paper is predominantly the cross-country empirical work carried out by macroeconomists. This work has three distinguishing features. First, researchers have often tried to integrate developing and developed countries in a single empirical framework; as we shall see, this endeavor is not without its problems. Second, the research makes intensive use of the cross-section variation in growth rates and other variables. Finally, the research questions are often inspired at least in part by recent growth theory. There is a renewed emphasis on human capital, and to a lesser extent, research and development, as important variables in explaining differing growth experiences.