The Mystery of Economic Growth

The growth of nations is one of the most important topics of our times. Economic growth not only poses an intellectual puzzle that occupies economists’ thinking and politicians’ agendas but also affects the lives of billions of people around the world. In The Mystery of Economic Growth, Elhanan Helpman tells us the tale of economic growth in a vivid and intellectually stimulating way. He organizes the tale around four themes: the importance of physical and human capital accumulation and how this accumulation interacts with technological change; the importance of knowledge accumulation and how knowledge shapes total factor productivity; the importance of global linkages between countries and how this interdependence affects the dissemination of knowledge; and finally the importance of institutions and how institutions provide incentives for accumulation of factors, creation of knowledge, and adoption to new economic environments. His main point is that economic growth is largely driven by institutions that promote innovation and adoption to technical change. Therefore, solving the mystery of economic growth depends on understanding the work of institutions. There has been extensive academic research on the causes and the consequences of