Political economy of growth

This book is concerned with the scope and method of con temporary economic analysis. Its starting-points are the major problems of economic policy common to the advanced indus trialized countries of the Western world. Many of these problems are shared by the developing countries and by the countries of Eastern Europe, but it is on the experience of those countries which for practical purposes can be identified as member countries of the Organization for Economic Co operation and Development (OECD) that I wish to draw for empirical evidence.

The book tries to demonstrate that the major problems currently besetting these advanced economies can best be understood within the framework of a theory of economic growth. This is so because the advanced economies of the modern world are characterized primarily by continuous change. Unfortunately, contemporary economic analysis, whether neo-classical or neo-Keynesian, does not provide a satisfactory theory of economic growth, and therefore we must turn to the classical tradition, with its much richer and broader scope, for the necessary ingredients. Nothing as ambitious as a comprehensive theory of growth will be offered; like Schumpeter, I do not aspire to do more than to identify tendencies. But I do believe that an approach to a theory of economic growth in the classical tradition can contribute more to an understanding of the way advanced economies actually behave than can be found in the 'arid formalism' of steady-state growth theories.