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These two volumes present empirical studies that have permanently altered professional debates over investment and productivity as sources of postwar economic growth in industrialized countries. The distinctive feature of investment is that returns can be internalized by the investor. The most straightforward application of this idea is to investments that create property rights, but these volumes broaden the meaning of capital formation to include investments in education and training. International Comparisons of Economic Growth focuses on comparisons among industrialized countries. Although Germany and Japan are often portrayed as economic adversaries of the US, postwar experiences in all three countries support policies that give high priority to stimulating and rewarding capital formation. In the Asian model of growth exemplified by Japan investments in tangible assets and human capital are especially critical during periods of rapid growth.
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