The Solow model of exogenous growth predicted a convergence trend in economic
growth based on the assumption of constant returns to scale (Solow 1957) while the
Romer model of endogenous growth claimed a divergence trend based on increasing
returns to scale in knowledge accumulation (Romer 1986; Arrow 1962; Lucas
1988). However, observed patterns in the world economy are more complex than the
predictions of neoclassical growth models (see Tables 1 and 2).
Section 7 concludes with a comparison between the equilibrium and evolutionary
perspectives in growth theory