This book by a Nobel laureate in economics begins with a brief exposition of Kenneth J. Arrow's classic paper -The Economic Implications of Learning by Doing- (1962). It shows how Arrow's idea fits into the modern theory of economic growth, and uses it as a springboard for a critical consideration of spectacular recent developments that have made growth theory a dynamic topic today. The author then develops a new theory that combines learning by doing (identifying it with the concept of -continuous improvement-) with a separate process of discrete -innovations.- Learning by doing leads to a...