New growth theory attempts to explain the process of long run economic growth through endogenous forces such as human capital, knowledge spillover and information technology. This book offers an up-to-date critical review of the most important economic issues in new growth theory and discusses its empirical evidence, optimality and usefulness in national policy making. Professor Sengupta critically analyzes the dynamic and disequilibrium models as applied to recent international growth and discusses their policy implications for structural adjustment, technological innovation and international spillover of knowledge. He empirically illustrates the various phases of growth in technology-intensive sectors such as flexible manufacturing and the semi-conductor and telecommunications industries, presenting new insights into the effects of the learning process on growth and the different phases of the innovation process. He also provides a detailed new approach to learning by doing. He then critically reviews the foreign exchange market in relation to international development. Lastly, he applies time-series econometric methods to R&D investment in human capital in a global framework.

New Growth Theory will be invaluable to graduate students and scholars of macroeconomics and researchers in growth theories and economic development.