Welcome to Econ Talk from the Library of Economics and Liberty. I'm your host Russ Roberts of George Mason University

and today we're podcasting from the Hoover Institution at Stanford University.

For more Econ Talk and additional readings and links related to this podcast, visit econtalk.org.

My guest is Robert Barrow, a senior fellow at the Hoover Institution and the Paul M. Warburg Professor of Economics at Harvard University.

He's written numerous books and articles on macroeconomics, monetary theory and economic growth. Robert, welcome to Econ Talk.

Thanks, glad to be here.

In recent years you've become very interested in economic growth. How has the economics professions' view of growth changed over the years since you've been a professional economist?

I suppose in general there's been a shift in the view that markets are more important.

This is not particularly economic growth but it certainly comes up in the growth context.

Also more recently there's more stress on the role of institutions, legal systems, political corruption, effects like that in terms of influencing economic growth.

Factors that in years past would be seen as having been outside economics.

Yes, exactly. I think the older work focused on some narrow economic concepts, things like saving rates, rates of population growth, levels of technology.

So partly the profession has incorporated those elements but also gone to additional ones which are less narrowly economic in some sense.

In the early days, meaning the early days of the last century, there was a big focus on capital and the implication was that you had more capital, you'd grow faster.

Is that a good summary of the state of the art for a while in the middle of the 1950s and 60s?

I don't really know if there's something wrong with the growth theory of the 1950s. It's so-called neoclassical growth model due to Bob Solo and some other prominent economists.

I think it is right that investment is important accumulating capital I think is important and accumulating human capital is perhaps at least as important as physical capital.

I think the insights from those models are good ones and the framework provided that from those models is good.

But I think we've gone also beyond that, supplementing in terms of the forces that matter.

I think also a lot about certain convergence questions which is particularly about whether poor economies tend in some regular way to catch up to rich ones.

I think that's a particularly compelling question that you can consider within that framework.

In the early days people thought there would be this natural convergence right that the poorer countries would have higher rates of return, capital would flow into those countries and that would mean they would grow faster, the richer economies would grow slower.

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