his thesis discusses the economic growth theory that Paul Romer introduced in his classic paper Endogenous Technological Change. The main improvement that Romer makes over the previous theory is to include an explicit model of the level of technology and how this level changes due to the activities of a research sector. In addition the intensity of the activity in the research sector is set endogenously in Romer's model. This is achieved in a simplified framework which makes everything in the economy analytically solvable in terms of a few parameters describing the large scale economy. As background material, the thesis also introduces and develops the neoclassical economic model. This then allows comparison and contrast to pre-existing economic growth theories that set technological growth exogenously to the model.
