WHY GROWTH RATES DIFFER—A SUMMARY AND APPRAISAL

This review article initially summarizes some of the highlights of the volume Why Growth Rates Differ , including the use of income shares as weights for the various factor inputs and some of the major factual conclusions drawn from the inter‐country comparisons. Some of the main factors in differences in income levels and differences in growth rates are then reviewed. In appraising the contribution of the volume, the monumental task is emphasized. This study illustrates the adaptability of the approach which Denison developed initially in The Sources of Economic Growth. The volume meets many of the questions and criticisms raised of his earlier study, and should encourage a shift of the discussion from methodology towards the substance of the empirical results. The volume introduces some shifts in emphasis on the importance of different factors in growth. The role of demand variations and the contribution of capital is considered, but the evidence in the volume gives less emphasis on the importance of these factors than earlier work by others in both the United States and Europe. The volume gives some emphasis to shifts out of agriculture and the self‐employed in the high postwar growth in many individual European countries. It considers the effects of reductions in trade barriers, and follows the view of most economists in playing this down. Advances in knowledge are also considered. Those who are interested in questions of economic growth, past and future, and economic policy in this area will find much in this volume for study and reflection.