Economic growth is one of the core issues of macroeconomics. The core framework of "neoclassical growth model" which came into being in1960s is still adopted by most economists. The model emphasizes that capital accumulation is the source of economic growth, and its most important prediction is "convergence", that is, the per capita output growth rate of different countries will "converge" to a stable and balanced growth path, and poor countries will eventually catch up with rich countries. However, the model ignores the technological progress factors that determine the long-term growth rate, so it cannot explain the huge differences in income levels among countries in the world. Since then, the neoclassical growth model is no longer active.
1Since the mid-1980s, the theory of economic growth has once again become the focus of macroeconomics, and a series of new theories have focused on the roots of technological progress. Research shows that technological progress, that is, the generation of new ideas, is different from general production inputs, because new ideas are not exclusive when applied to production, so they can be freely adopted by any number of producers. This feature means that technological progress needs some kind of monopoly power-this is a typical imperfect competition. During the1990s, a large number of models with this function appeared. These theories are called "endogenous growth theory" because the rate of technological change is determined by the model itself, which in turn determines the long-term economic growth rate.
During this period, Barrow established his authoritative position in the field of economic growth. His paper "Government Expenditure in Simple Endogenous Growth Model" (published in Journal of Political Economy, 1990) discusses the relationship between government expenditure and economic growth in endogenous growth model and analyzes the optimal tax issue. Then, in his two papers "Economic Growth of Countries" (Economic Quarterly 199 1) and "Convergence" in cooperation with XavierSala. I Martin (Journal of Political Economy 1992), who learned from various countries.
These studies show that "convergence" only exists under certain conditions, and only when a series of explanatory variables are the same can the economy "converge" to the same balanced growth path. These variables include government policies and systems, the nature of the education system, people's propensity to save and their reproductive behavior, and may also include colonial history and religious traditions. Generally speaking, the growth rate of these variables does not exceed the average level, because their value in poor countries is very low.
According to ESI (American Science Information Center) data, Barrow's paper "Economic Growth of Countries" was cited 577 times in1990s, which was the most cited paper, and Barrow became the most cited economist.
Economic Growth (MIT Press), co-authored by Barrow and Sarah E. Martin, 1995, is a masterpiece of economic growth theory. This book systematically introduces the main research results on economic growth during the period of 1950 ~ 1990, emphasizing the empirical application of economic growth theory and the relationship between theoretical assumptions and data. This combination of theory and experience is the most exciting performance of the revival of economic growth theory. The book is regarded as a classic guide to thinking about growth and has been translated into six languages, including French, German, Japanese, China, Italian and Spanish.