Augmented Solow Model

p. 318-321

With the new developments of adding on human capital onto the Solow growth model by Mankiw, Romer, and Weil, everyone thought that all observations of the differences of the wealth of nations had been accounted for. Many thought that convergence truly was important to the steady state after all. Alwyn Young discusses the different approaches of the island states of Hong Kong and Singapore. Instead of having a more laissez-faire attitude like Hong Kong, Singapore picked favorites among industries, thus stunting their economic growth even though the were spending double of their annual GDP compared to Hong Kong.