Description

Robert Solow received the Nobel Prize in economics in 1987, and hiscontributions to growth theory, productivity, and short run macroeconomics haveinfluenced an entire generation of scholars. The essays in this book extend andelaborate on many of the important ideas Solow has either originated or developed inthe past three decades.Frank Hahn and Avinash Dixit offer useful surveys of thegrowth literature. Hahn reflects on specific problems in standard growth models, while Dixit presents a chronological review of research developments. Robert Halland Lawrence Summers present challenging empirical findings. Hall shows that theSolow productivity residual is in fact correlated with variables which, according toSolow's assumptions, it should not be correlated with. Summers uses multi-countrydata to investigate the apparent divergence between private and social rates ofreturn to capital. He argues that this phenomenon stems from the dependence of therate of technical progress on the rate of capital formation and discusses the policyimplications of this idea. Olivier Jean Blanchard and Peter Diamond describe asearch-matching model that is a welcome addition to understanding the Beveridgecurve. Also included are comments by Eytan Shoshinski, Joseph Stiglitz, MartinBaily, William Nordhaus, George Aherlot, and Robert Gorden. Robert Solow hasprovided a response to both the essays and these comments. The book concludes with abibliography of Solow's work.Peter Diamond is John and Jennie S. McDonald Professorof Economics at MIT.