Sergio Rebelo's paper analyzes long-run policy effects on economic growth, emphasizing that cross-country differences in growth rates can result from varying government policies. The models presented show that growth is endogenous, not driven by exogenous technological progress, and that policies like taxation can influence growth rates. The paper introduces a model with two sectors: one producing investment goods and another producing consumption goods. The model incorporates nonreproducible factors like land and shows that growth depends on the rate of capital accumulation and the elasticity of intertemporal substitution. Taxation affects the real interest rate and thus the growth rate, with higher tax rates leading to lower growth. The paper also discusses the role of savings and how changes in the savings rate can influence growth. It highlights that endogenous growth can occur with constant returns to scale technologies, provided there is a "core" of capital goods that can be produced without nonreproducible factors. The paper concludes that government policies, including taxation and savings rates, play a significant role in long-run growth, and that these models provide insights into the mechanisms behind cross-country growth differences.Sergio Rebelo's paper analyzes long-run policy effects on economic growth, emphasizing that cross-country differences in growth rates can result from varying government policies. The models presented show that growth is endogenous, not driven by exogenous technological progress, and that policies like taxation can influence growth rates. The paper introduces a model with two sectors: one producing investment goods and another producing consumption goods. The model incorporates nonreproducible factors like land and shows that growth depends on the rate of capital accumulation and the elasticity of intertemporal substitution. Taxation affects the real interest rate and thus the growth rate, with higher tax rates leading to lower growth. The paper also discusses the role of savings and how changes in the savings rate can influence growth. It highlights that endogenous growth can occur with constant returns to scale technologies, provided there is a "core" of capital goods that can be produced without nonreproducible factors. The paper concludes that government policies, including taxation and savings rates, play a significant role in long-run growth, and that these models provide insights into the mechanisms behind cross-country growth differences.