This revised edition includes new material on foreign assistance and debt and has updated statistics and the institutional material. The book aims to provide students with an understanding of the theory and practice of economic development.

Today, the average person in the world lives a more comfortable life compared to the richest people in the last century and, in fact, their life is more comfortable than even the kings of the previous centuries. We owe this situation first and foremost to the high growth rates that gained momentum after the industrial revolution. Although high welfare level is not dependent upon economic growth alone, it is a prerequisite for welfare. Nobody craves equality in poverty. In this book, in addition to the theoretical development of economic growth, the sources and potential effects of economic growth have been analysed using various methods. As such, it will serve as an essential reference work for researchers and policy makers.

This book deals with Growth Theory, an important subject taught as a part of economic theory. Amongst other topics, it introduces the literature on growth and inequality as well as a major critique of growth economics by Charles Jones. These issues remained unaddressed in an earlier volume by the author, Growth Theory: Solow and His Modern Exponents (OUP 2005). Developed on the earlier work, the present volume focuses on: long run growth growth and infrastructure taxation policies for growth human capital formation a unified theoretical framework to help students travel from the world of old growth theory to modern growth theory intuitive as well as rigorous development of optimal control theory using undergraduate mathematical tools analysis of India's long term growth experience. For an interactive platform on updates and queries on the book and clarifications by the author, please visit the Discussion Forum: Modern Growth Theory, OUP, 2010 at this URL http:--economicsteaching.wordpress.com-2010-10-28-modern-growth-theory-

Conventional Economics and New Economic Cycles -- Inflation and the New Economy -- New Growth Heights -- 10. Conclusion -- Notes -- Index

The theory of economic development is a branch of economic dynamics. Any discussion of the theory must involve dynamics even though not all dynamic problems are necessarily related to economic development. The theory's primary locus is upon the nice paths of economic variables. Stationary states, which have been the main concern of modem economic development theory, are actually special cases of economic dynamics. In this study, we propose an economic development theory within the framework of input-output systems and neoclassical economics. No political problems will be dealt with, although this does not mean that questions such as why Japan had a higher growth rate than China in the past are not important. Similarly, rather than dealing with the psychological and institutional aspects of in economic development processes we only suggest ways (or methods, as Hicks would call them) for analyzing what determines economic development from the point of view of "pure" economics. Our main contribution to economic growth theory is that we investigate various nonlinear dynamic phenomena such as bifurcations and economic cycles. We emphasize that oscillations and structural changes are not rare but universal in a progressive economy. No economic system can be stabilized forever if change is permitted.

Abstract: Development economics in its early years created the image of a fierce fight between advocates of contrasting theories or approaches- "balanced growth" vs. "unbalanced growth" or "program loans" vs. "project loans." This view has the merit to highlight such conflicts in great detail; yet it fails to take into account the reality of development economics as it was practiced in the field. This paper reassesses these old conflicts by complementing the traditional focus on theoretical debates with an emphasis on the practice of development economics. A particularly interesting example is the debate between Albert Hirschman, one of the fathers of the "unbalanced growth" approach, and Lauchlin Currie, among the advocates of "balanced growth" on how to foster iron production in Colombia in the 1950s. An analysis of the positions held by these two economists shows that they were in fact much less antithetical than is usually held and, indeed, were in some fundamental aspects surprisingly similar. Debates among development economists during the 1950s thus must be explained-at least partially-as the natural dynamics of an emerging discipline that took shape when different groups tried to achieve supremacy-or at least legitimacy-through the creation of mutually delegitimizing systemic theories.