Understanding Economic Growth: Review Article of Why Economies Grow

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Abstract

This review article examines Jeff Madrick’s book Why Economies Grow (2002), which argues that market size and demand-side forces — rather than technological change — are the primary drivers of economic growth. The reviewer summarizes Madrick’s historical account of U.S. productivity growth from the 19th century through the post-1995 acceleration, including examples such as the interchangeability of parts, the assembly line, and ICT. While acknowledging the book’s stimulating demand-side perspective, the reviewer notes that Madrick’s framework complements rather than replaces conventional supply-side explanations, and questions his pessimistic conclusions about the sustainability of strong U.S. growth.

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