So let’s start to think: what does drive growth in the long run? In fact, growth theory – much like central banking – has come a long way. As everyone knows, Solow’s work in the late ’50s produced two startling insights.1 First, that smooth factor substitutability could rid us of the Harrod-Domar boom-bust cycle.
This, in fact, paved the way for a proper analysis of  1  Solow (1956, 1957). BIS central bankers’ speeches  1  sustainable growth.2 His second insight was that growth was driven not only by factor accumulation but also by technological progress.