Customer Reviews

Introduction to Modern Economic Growth

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It's sad to see how this forum is used by "geniuses" such as Thornstein Veblen (who probably hasn't read the book) to write uninformative reviews that make no sense. I guess the profound influence that Acemoglu has had on economists across the world as well as the John Bates Clark medal granted to him by the American Economic Association in 2005 speak for themselves...

Now let's move to the book (which is what these reviews are supposed to be about):

I've had the opportunity to go through the book carefully and I think it is hard to find an economics textbook that is as comprehensive and self-contained as this one.

The first part convincingly motivates what the most important open questions in the study of economic growth are. It even touches on topics such as institutions, and geography which many growth textbooks often ignore.

The chapters in parts I-III are very useful for teaching an intermediate course in Economic Growth, with very detailed and rigorous explanations of the formal arguments. I loved the fact that he takes the time to go through some of the details of the proofs which is very helpful both for students and teachers.

Parts IV-VIII contain more advanced material on very relevant topics such as technology, trade, and political economy. I especially liked part VIII on the Political Economy of Growth which only a textbook written by Acemoglu, who has made some of the most recent substantial contributions to this field, could include.

Last but not least, I am sure students will be very thankful for the very detailed Mathematical Appendices that level the field (to some extent) for students with different mathematical backgrounds.

In sum, I totally recommend this textbook to both intermediate and graduate students interested in the study of economic growth. Only an economist who has made contributions to some of the topics covered in the book could write such a great textbook.

The book is excellent for its extensive coverage. In addition to discussing growth models, as the title suggests, it includes discussions about the tools used to solve these models. Such topics inlude the theory of optimization in both continuous and discrete time. However, for extensive treatments of dynamic programming and continuous time optimization, there are better books devoted to those topics alone, however, it is nice to have the important results all in one book.

Another nice feature of the book is the discussion of the fundamental theorems in a variety of settings. It is really convenient to have these, along with detailed proofs, in the same book that covers specific growth models.

Having said that, the most important thing is that there is a very solid treatment of economic growth, both from an empirical and theoretical perspective. Most of the recent developments are given at least some discussion and excellent motivation. To have all of these covered in one book is really amazing, and the author ties it all together very nicely.

I find the exercises to be crucial for understanding new material, with some being easy and others quite difficult. I think this book is a must have for graduate students who want to get there feet wet in growth theory.

Here is how good this book is. I recently moved and, upon organizing my economics books on my bookshelves, I had a truly hard time figuring out where to put Acemoglu's Introduction to Modern Economic Growth.

It could be beside my other growth theory textbooks, which will have to accept their place as just timid predecessors of this amazingly comprehensive and yet equally pedagogical volume. Or, given its excellent treatment of Dynamic Optimization Methods, I could place it by the couple of best graduate-level Macroeconomic and Macroeconomic Methods textbooks around. Even placing it along my Microeconomics textbooks did not seem far-fetched; Acemoglu truly conveys much of the intricacies of General Equilibrium Theory with a clarity I have not found elsewhere. And then, of course, the Mathematical Appendix has been such a useful constant reference since I have the book, that I could well put it together with my Mathematical Economics books.

As a young economist, I have no doubt that this book will be a great companion in the years to come and I recommend it to anyone who is passionate about economics.

"Economic growth" continues to be of interest largely because of the large part of humanity whose living standards are so very substantially worse than the middle-class norm of OECD countries. Economists are as interested as anyone else, whence university texts full of economists' economic growth research:

-- Acemoglu, "Introduction to Modern Economic Growth" (2009)
-- Aghion and Howitt, "The Economics of Growth" (2009)
-- Weil, "Economic Growth" (2nd ed., 2009)

As a Ph.D. economist who has resided and worked for the past thirty years in low-income areas of several continents, in countries of which the wealthiest was Egypt, "Economic Growth" is a daily interest. How does the enterprise sector relate to what attracts our attention to low-income countries in the first place: hunger, physical insecurity, abusive social relations? Does it pass these problems by, or does it alleviate them? Should interested outsiders care about "the economy" and if so what should they do? Or should they concentrate on relief, or on political reform?

This review of the three texts listed above looks at them from the point of view of their usefulness in relation to this particular interest.

Although Weil's undergraduate text stays away from the mathematics that dominate the other two, all three books are quite similar in that each is an encyclopedic exposition of models of aggregate growth, along with numerous factors that have been suggested to affect it. None is a monograph that states and defends a thesis. They all prepare a student to grapple with problems in the hope that the students will solve them.

Perhaps that is the fate of a textbook: anything more assertive would be commercially limiting.

Nonetheless, the result is a certain defensiveness. The task of the two graduate texts in particular seems to be to demonstrate that, if observation of low-income countries or of growth should give rise to an idea, then the economics profession can model it.

This is not to say that the authors haven't had ideas. But none of these texts is a handbook of things to be done: how to create economic growth or improve its quality. The implication, unfortunately, is that the authors don't have that toolkit to offer. (The graduate texts are, however, handbooks on how to model.)

The reader will learn quite a bit about the world from Weil's book, which is more descriptive than the other two. Aghion and Howitt's is immensely learned, but Acemoglu's book stands out in a couple ways. First, it is the only one to cross the line and become an applied mathematics textbook pure and simple. Secondly, however, its great length affords space for an "Epilogue," an explicit outlier that contains some non-mathematical statements. And it's here where I can pin-point what seems to me to be the underlying methodological limitation.

Acemoglu says about Chinese history, on page 867 (!): "When prospects for economic growth conflicted with political stability, the elite opted for maintaining stability, even if this came at the expense of potential economic growth. Thus China tightly controlled ... ."

Let me state the principle that is illustrated here but that Acemoglu has perhaps overlooked: Things don't happen for causes. Things happen because people do them.

If things happened for causes, then we might indeed model cause and effect -- and probably conclude that that's all we could do.

But all the models and history are after the fact. If the fact were different, we'd be modeling that instead. And it always might have been different. China's history, in point of fact, finally did read: "Even though the measures required for economic growth conflicted with political stability, the elite found a way to take the measures and preserve political structures, resulting in massive benefits that ultimately were both economic and political." China's elite might very well have done this at any time; it's not for us to say that they couldn't have.

Acemoglu also overlooked this principle of action in the section on pp. 868-70 about Western Europe's growth after 1800. He says that two things were different in the pre-1800 period: no systematic investment in human capital, and the presence of "authoritarian" political regimes. But he then ignores investment in human capital in his story of the post-1800 period.

This is a fatal error. People make the political institutions what they are, make the families what they are, and make the firms what they are. "Things happen because people do them."

People who bring about change do not drop from outer space; they "distill their frenzy" from somewhere, and it's usually from an intellectual outlook they encountered in schools and universities.

If we hope low-income countries' enterprises will become more world class, their owners and managers must have this as their vision. If we hope that international standards of human rights will prevail, then social leaders must have that as their vision. And if we hope that Total Factor Productivity will rise in low-income countries, it is people who will make that happen.

It is actually a bit odd that all three texts should tell the basic story whose thread runs through savings, capital accumulation, TFP, and innovation without tackling what Acemoglu calls (p. 873) "the industrial organization of innovation." I give Acemoglu credit for this excellent term.

Surely the industrial organization of innovation would include universities investing in human capital, but perhaps this kind of investment will have to have happened more widely in low-income countries before it's modeled.

I conclude by reiterating that each of these three texts is encyclopedic and extremely impressive.

If you are a grad student and your research is related to development or growth, this book is mandatory!

I love this book, it contains all modern economic growth models, but it also has the basic ones that gave birth to this new branch of models. A former student of D.Acemoglu taught me a Macro course based on this book and it was amazing. I also recommend it for self study because explanations are very clear. Math requeriments are standard, but it also has some appendixes where he explains all math needed to understand advanced economics.

i buy this book from the cheapest store listed on amazon to save several dollars, but the new book is not in perfect condition. there is some crease on hardcover. however it's still okay for reading. i buy it just because it's a growth theory book written by acemoglu, an amazing guy in this field.

This book, by one of the most respected contributors to macro, is a one stop shop for economic growth. It is a great book for understanding the fundamentals of macro theory as well as the progression of the theoretical and empirical work in every sub field of growth. It is a must for all graduate students, and I am sure it will be great addition to any researchers collection.

Este é o primeiro livro que eu vejo que possui uma abordagem matematicamente formal para a Macroeconomia, em particular para a teoria de crescimento.

This book is bad, bad, bad. Plain and simple. I give it one star b/c I don't know how to advance to the next screen and submit for no stars.

Having suffered the extreme misfortune of having been assigned to read and present some of Acemoglu's papers (some 2-3 times now), I have a lot of pent-up aggression that needs to be released. Now will be that time.

Acemoglu is that nerdy, pudgy, 4-eyed kid from school who everyone picks on and hates b/c he doesn't shut-up, is ignorant, and incredibly and persistently annoying. The kid who says stupid, ignorant things which are just plain dumb on multiple levels, who does not understand what he should know -- just doesn't get it -- and who everyone therefore (or perhaps just me) wants to strangle with bare hands. He evokes the same feelings in me I get when I watch George W. Bush give a speech. (If you like George W. Bush, then you will love this book!)

So that is how Acemoglu makes me feel when I'm forced to read anything by him. Now, what is it that gives me those feelings? Here are some of the things I hate about his research/book:

1) His famed settler mortality data, which Albouy has convincingly shown were fabricated, do not merely affect GDP via institutions -- they also should and would have affected levels of technology, human capital, and culture, each of which are persistent. The kicker is that since he had data on initial institutions, there was no reason to make up the settler mortality proxy in the first place. Lastly, "settler mortality" is more sensibly a proxy for regions of the world similar to Europe, so to the extent you believe his results, they could just as well be seen as confirming Crosby-Diamond, which Acemoglu thinks he's arguing against.

2) His unquestioned use of Maddison's data, which Maddison, by all accounts, simply made up, and which implies (counterfactually) that there never was a Malthusian world. Aside from being made-up, Maddison's data are obviously and fatally flawed.

3) His arrogance in thinking that he could write a book about economic growth without knowing anything about history, and his arrogance in thinking that he could write about geography and development without really having read Jared Diamond (and without even citing Alfred Crosby). It is frustrating that he equates the belief that geography is important for development and history with "geographic determinism" -- that geography is the only thing which matters. No thinking person could believe that, and reading Diamond or Sacchs in the round suggests that they are certainly NOT geographical determinists.

4) As such, he "misunderestimates" the "geography hypothesis" as he calls it.

5) He is a full time believer in the idea that by doing algebra (but not by reading the history of development), one can gain insights into the history of development.

6) A troubling array of shoddy facts, inaccurate statements, frustratingly wrong-headed logic, and all hidden behind a veneer of math and regressions. Some of these include:

a) His insistence that the North Korea/South Korea split tells us that geography and culture do not matter, and that it is institutions such as property rights which do matter for growth. The trouble with this is that North Korea was taken over by an utter madman who was an absolute dictator and who shut off trade and contact with the outside world. Logically, it's like saying that eating well and exercise do not matter for health b/c, look, you and your brother (who got hit by a bus) ate the same things and exercised the same amount, and your brother got hit by a bus and died. Of course, looking both ways before you cross the street is also important, but then again, who is saying that it isn't? (Acemoglu is basically saying it's the only thing...) The question is which institutions matter, and since North Korea got almost all institutions (including culture!) terribly wrong, the North Korea/South Korea split is actually not insightful.

b) In 'moglu logic, the "Reversal of Fortune" was supposedly that countries like Argentina and North America which were poor in 1500 are now rich, and vice versa has just one flaw. The peoples who lived in modern day argentina and north america are now dead, not rich. and we don't actually have any idea that say, north america was more/less developed than mexico. and certainly don't know if it was rich (and those are two different things, which acemoglu doesn't understand, b/c the world was malthusian then.

8) How does a tenured faculty member at MIT in economics not understand the Malthusian model? WTF?

9) In fact, there are many theories that can be taken "off the shelf" so-to-speak, which do tell us quite a bit about economic development, such as in Krugman's Geography & Trade, the Malthusian Model, Crosby-Jared Diamond, Engerman-Sokoloff, etc., which are all either butchered in Acemoglu's retelling or omitted.

OK, so I've clearly used up more actual thought writing this review than Acemoglu did writing his entire book...

In short, this book is sooooo bad it casts a giant gloom over, not just Acemoglu, b/c u can't blame him necessarily, he is what he is, but it really should make us all think differently about MIT and economics in general. This book is bad enough to cast a black shadow over the department and the entire field of economics. This book is fodder for those who equate economists with medieval priests or doctors, who babble on about things about which they know nothing, and have no value-added to society.

This book is of interest to sociologists or anthropologists wishing to document the funny "sociology of economics" and the anachronistic, heavily ideological lens with which conservative economists view the world.