Theoretical Approaches to Economic Growth and Development: An Interdisciplinary Perspective

Acknowledgments
Introduction
Contents
Abbreviations
List of Figures
List of Tables
Part I Methodology and Introduction
1 The Methodological Puzzle
	1.1 Introduction
	1.2 Navigating Between Theories
		1.2.1 Theory Construction
		1.2.2 Positivism Versus Normativism in Economic Theory
		1.2.3 Expanded Approaches in Economic Methodology
		1.2.4 Models and Theories: The Role of Mathematics
		1.2.5 Criteria for Choosing Theory and Hypothesis
		1.2.6 Predictionism and Operationalism
	1.3 Time and Spatial Dimensions of Economic Development
	1.4 Concluding Thoughts: Methodological Pluralism
	References
2 Introduction to General and Integrated Development and Growth
	2.1 Introduction
	2.2 The Key Questions for Growth
	2.3 Growth and Prosperity
	2.4 Output Gap and Potential Growth
	2.5 Growth and Development
	2.6 The Relationship Between the Part and the Aggregate
	2.7 Stocks and Flows Analysis
	2.8 Towards a General and Integrated Concept of Economic Development and Growth
	References
Part II Important Concepts of Economic Behavior
3 Economic Action, Cultural Background, and Institutions
	3.1 Introduction
	3.2 Decision-Making and Alternative Rules of Economic Action
		3.2.1 Decision-Making Process
		3.2.2 The Birth of Culture and Institutions: Coordination
		3.2.3 Formation of Stereotypes and Development of Personal Traits
		3.2.4 Humans in Economic Action: Behaviors and Preferences
		3.2.5 The Role of Goals, Targets, and Motives
		3.2.6 Types of Institutions
		3.2.7 Institution Selection Processes
		3.2.8 The Behavior of Business
	3.3 Time and Space in Institutions and Preferences
	3.4 The Global Overview of Cultural Background and Institutions
	References
4 Complex Economic Systems, Information and Forms of Capitalism
	4.1 Introduction
	4.2 Simple Versus Complex Economic Systems
	4.3 Complexity in Economic Theory
	4.4 “Tableau Économique” and Complex Circular Flow of Economic Activity
	4.5 The Analysis of Complexity
	4.6 Measuring Complexity
	4.7 Information and Economics
	4.8 Information Effectiveness
	4.9 Complexity and Forms of Capitalism
	References
5 Politics and Governance
	5.1 Introduction
	5.2 Politics, Economics and Growth
		5.2.1 The Link Between Politics and Economics
		5.2.2 Politics and Economic Results
		5.2.3 Strong/Powerless State and Economic Outcomes
	5.3 Policy and Distribution of Income and Wealth
	5.4 Political Costs and Structural Reforms
	5.5 Politics and Representation
		5.5.1 Democracy and the Economic System
		5.5.2 Elites and Pressure Groups
		5.5.3 Politics and Cultural Background
		5.5.4 Politics and Media
	5.6 Politics and Economic Change
		5.6.1 Resilience of Society and the State
		5.6.2 Society and de-Industrialization
		5.6.3 Social Change and the Middle Class
		5.6.4 Economic Crisis and Populism
	References
6 Uncertainty
	6.1 Introduction
	6.2 Risks and Uncertainty
	6.3 The Global Outlook on Risk and Uncertainty
	6.4 The Economic Outcome of Uncertainty
	References
7 Expectations
	7.1 Introduction
	7.2 Foresight and Forecasts
	7.3 Forecasts and Expectations
	7.4 Adam Smith and Expectations
	7.5 Adaptive Expectations
	7.6 Rational Expectations
	7.7 The Simplicity of the Rules of Thumb
	7.8 The Role of Knowledge and Learning
	7.9 Achieving Equilibrium: History Versus Expectations
	References
8 Entrepreneurship
	8.1 Introduction
	8.2 Entrepreneurship as a Basic Concept of Human Economic Activity
	8.3 Entrepreneurship and Entrepreneurial Opportunity
	8.4 Entrepreneurial Failure
	8.5 Opportunity and Necessity Entrepreneurship
	8.6 Institutions and Entrepreneurship
	8.7 Cultural Values and Entrepreneurship
	8.8 Organizational Culture
	8.9 Entrepreneurial Decisions Under Conditions of Uncertainty
	8.10 Entrepreneurship and Creativity
	8.11 Entrepreneurship and Innovation
	References
Part III Growth Sources in Economic Thought
9 The Evolution of Economy and Economic Thought
	9.1 Introduction
	9.2 Economy and Evolution of Economic Thought
	9.3 From the Birth of Economics to the Great Global Economic Depression (1720–1940)
	9.4 The Outburst of Economic Thought: After the Great Depression and Until the Period of High Growth and Low Inflation (1940–1970)
	9.5 Economy with Increasing Prices (1970–1980)
	9.6 The Economy from the Period of Great Moderation to the Period of Great Recession (1980–2008)
	9.7 Structural Changes in Global Economy in the Aftermath of the Great Recession (2008 to Date)
	References
10 The Sources of Growth from the Birth of Economics to the Rise of the New Era
	10.1 Introduction
	10.2 Division of Labor, Population Change, and the Fundamental Laws of Capitalism
		10.2.1 Adam Smith (1723–1790)
		10.2.2 Thomas Robert Malthus (1766–1834)
		10.2.3 Jeremy Bentham (1748–1832)
		10.2.4 David Ricardo (1772–1823)
		10.2.5 John Stuart Mill (1806–1873)
		10.2.6 Edwin Chadwick (1800–1890)
		10.2.7 Karl Marx (1818–1883)
		10.2.8 Charles Darwin (1809–1882)
	10.3 Absolute and Comparative Advantage
	10.4 Factor Endowment Theory
	References
11 The Sources of Growth from the Beginning of Economics to the Emergence of the New Era: Equilibrium, Evolutionary Development, Schumpeter and Keynes
	11.1 Introduction
	11.2 Innovation, Diminishing Returns, and General Equilibrium in the Neoclassical Economists
	11.3 The Growth Approach According to Veblen
	11.4 Relative Prices and the Entrepreneurs for Austrians and Schumpeter
	11.5 Demand, Expectations, and Uncertainty in General Theory
	References
12 Neoclassical Synthesis and Keynesian Development
	12.1 Introduction
	12.2 The Neoclassical Synthesis
		12.2.1 The Contribution of Hicks
		12.2.2 The Contribution of F. Modigliani
		12.2.3 The Contribution of J. Tobin
		12.2.4 The Contribution of P. Samuelson and R. Solow and the Phillips Curve
	12.3 Keynesians, Real Demand, Capital Allocation, and Accumulation
	12.4 Effective Institutions and Reducing Uncertainty in the Theory of Evolutionism
	12.5 Balanced Dualism and Unbalanced Structural Development
		12.5.1 Unbalanced and Balanced Growth
	12.6 Catching Up Effects and Developmental Stages
	12.7 Development Theories and Sources of Growth
	References
13 Solowian Growth and AK Models
	13.1 Introduction
	13.2 Exogenous Growth: Savings, Exogenous Technology, Preferences, and Expectations
	13.3 Overlapping Generation Models
	13.4 Learning by Doing in AK Models
	References
14 International Trade Relations, Optimum Currency Areas, Externalities, and Public Choice
	14.1 Introduction
	14.2 Optimum Currency Areas
	14.3 Leverage, Risk Diversification, and Effective Markets
	14.4 Monetarism and Neutrality of Money
	14.5 Public Choice, Regulation, and Rent-Seeking
	14.6 Externalities and Institutions
	14.7 Industrial Organization and Uncertainty in Perfect and Imperfect Markets
	14.8 Game Theory and Human Interaction
	14.9 Nash’s Non-rational Equilibrium
	References
15 The Era of Low Growth and High Inflation: Contemporary International Trade Theories, New Classics, New Keynesian, Human Capital, Contractization Theories, and Behavioral Economics Under Uncertainty
	15.1 Introduction
	15.2 The New Classical Economics: Flexible Prices, Market Clearing, and Rational Expectations
	15.3 New Keynesian Economics: Market Imperfections
	15.4 Human Capital as Intangible Capital
	15.5 Theories of Cotractization, Agency Cost, Adverse Selection, Moral Hazard, and Signaling
	15.6 Trading Theories Based on Business and New Trade Theory: Product Life Cycle, Porter’s Advantage, Barriers to Entry
	15.7 Behavioral Economics and Decision-Making Under Conditions of Uncertainty
	References
16 The Great Moderation, Real Business Cycles, and Dynamic General Equilibrium Models
	16.1 Introduction
	16.2 The Evolution of the New Keynesians: Microfoundation of Growth Economics
	16.3 Real Business Cycles and Growth: Supply Shocks
	16.4 Dynamic Stochastic General Equilibrium Models (DSGE): Technological Shocks
	16.5 Great Moderation and Central Banks Coordination
	16.6 Post-Keynesian Economic Theory and the Financial Instability Hypothesis
	References
17 Endogenous Growth, Convergence, and Evolutionism
	17.1 Introduction
	17.2 Endogenous Growth: Summary
		17.2.1 P. Romer’s Product Variety Model
		17.2.2 Luca’s Model Based on the Deepening of Knowledge
		17.2.3 Τhe Schumpeterian Model
	17.3 The Convergence of Economies
	17.4 Evolutionism: Neo-Darwinism
	References
18 The Macroeconomic and Development Debate After the Great Recession: The European Crisis, Deleveraging, and Secular Stagnation
	18.1 Introduction
	18.2 The Nature of the Great Recession
		18.2.1 The 2008 Crisis in the United States, and Globally
		18.2.2 The European Crisis
	18.3 The Macroeconomic Debate
		18.3.1 Deleveraging, Balance Sheets Recession and Weak Demand
		18.3.2 Managing the European Crisis During the Great Recession
		18.3.3 The Hypothesis of the Secular Stagnation
	18.4 The Hysteresis Issue
	18.5 Monetary Policy: Zero Lower Bound, Quantitative Easing, Forward Guidance, and “Helicopter Money”
	References
19 The Macroeconomic and Development Debate After the Great Recession: Fiscal Space, Multipliers and GDP, Debt Supercycle and Supply-Side Economics
	19.1 Introduction
	19.2 Fiscal Space and Fiscal Multipliers
	19.3 Multiple Equilibrium Points in Public Debt Costs and Confidence
	19.4 Over-Indebtedness and the Debt Supercycle Hypothesis
	19.5 Increasing Supply Opportunities, Structural Changes, Ordoliberals and Neo-Mercantilism
	References
20 Growth and Development Implications of Covid-19
	20.1 Introduction
	20.2 Pandemics and Economy in the Human History
	20.3 Covid-19 Infects the Economy
	20.4 Pandemic and Economic Recession Interactions
	20.5 Finances of Covid-19
		20.5.1 The Economic Situation Under Pressure
		20.5.2 State Finances
		20.5.3 Corporate Finances
		20.5.4 International Finances
	20.6 The Covid Moment, Monetization of Debt, Helicopter Money and Modern Money Theory
	20.7 Economic Policies in the Time of Covid-19
	20.8 The Long-Term Effects of Covid-19
	References
Part IV International Financial Architecture and the Consolidated Financial Transaction Framework
21 The International Economic Architecture
	21.1 Introduction
	21.2 International Economic Architecture
	21.3 International Economic Institutions
		21.3.1 Established Organizations
		21.3.2 Councils and Cooperative Models
	21.4 Global Trade Institutions
		21.4.1 Recognized Organizations
		21.4.2 International Trade Agreements
	21.5 International Governance Bodies
	21.6 International Transnational Partnerships
	References
22 Central Banks, Reserve Currencies, International Chains, and International Interactions
	22.1 Introduction
	22.2 Central Banks and Cooperation
	22.3 Reserve Currencies
	22.4 Currency Management and Manipulation
	22.5 Extension of Global Supply Chains
	22.6 Spillovers and Contagion Effect
	22.7 The Shortage of Safe Assets
	References
Appendix: The Integrated Framework of International Financial Markets and Transactions
References
Index