Robert Solow's 1956 paper A Contribution to the Theory of Economic Growth set up the workhorse model of growth economics for fifty years and won Solow a 1987 Nobel: output is a function of capital and labour, capital accumulates through saving, labour grows exogenously, output per worker rises only if technology improves. When Solow took the model to the data, capital accumulation explained only one-eighth of US productivity growth 1909–1949 — the remaining seven-eighths was a residual he labelled technical change. The Solow residual turned out to be most of growth, and seven decades later the discipline still does not fully agree on what fills it.
The Solow model makes a clean prediction — capital deepening alone yields diminishing returns, so a country accumulating capital should converge to a steady-state level of output per worker, and long-run growth requires technological progress. The empirical implications only partly hold. Conditional convergence within similar institutional groups is observed, unconditional convergence is not. Endogenous growth theory (Romer 1990, Lucas 1988) put technology itself inside the model as intentional R&D, with the non-rivalry of ideas generating increasing returns — Romer's 2018 Nobel made ideas the engine. None of this fully resolves what made the Industrial Revolution happen, and the historical literature distributes the work across over-determined drivers. Vaclav Smil's energy-historical scholarship argues the coal-to-oil-to-gas transition is the largest single factor in post-1800 prosperity (per-capita energy ~30× from 1800 to 2000). Mokyr's A Culture of Growth traces the European scientific revolution and the diffusion of useful knowledge. The institutionalist line from North through Acemoglu, Johnson, and Robinson (Why Nations Fail, 2024 Nobel) argues that inclusive rather than extractive institutions are necessary for sustained growth. Diamond's Guns, Germs, and Steel and Sachs's tropical-disease arguments locate part of the pattern in latitude, disease environment, soil, and navigable rivers. The colonial-extraction literature (Walter Rodney's How Europe Underdeveloped Africa and recent quantitative work) argues that European industrialisation was funded and accelerated by extraction from Africa, the Americas, and Asia. Long-run growth is over-determined; relative weights are an active research question.
The growth slowdown — per-capita GDP growth in advanced economies running slower since 1973 than from 1947–1973, slower again since 2008 — is the central empirical puzzle in growth economics. Candidate explanations: secular stagnation (Summers's chronic excess savings over investment), technological slowdown (Robert Gordon's Rise and Fall of American Growth, 2016), measurement issues in digital products, demographic headwinds, energy-transition costs. AI and productivity: whether LLMs and AI agents produce a new productivity boom (Brynjolfsson and Acemoglu actively debating in 2024–2025) is one of the most consequential open questions in macroeconomics. Any confident-sounding answer to why some countries are rich and others poor is probably overstating its case.