Modern Growth Theory Arguments

Abstract

Μodern economic science has to revise and adjust to emerging conditions its key notions about the sources of economic growth and to provide a new framework of refined theory and more effective policies. Accordingly, this chapter gathers the basic theoretical assumptions formed over time by major economic schools of thought, related to policies for growth, highlighting the persistent debate on the effectiveness of macroeconomic prudential policies and the need to revise critical assumptions in the wake of the last global financial crisis. Given that prominent economists of different ideological positions analysed and made proposals regarding the Great Recession of 2008, which were often diametrically opposed, emphasis is given also to ideological biases that permeate economic models.