The New Endogenous Growth Theory: An Investigation on Growth Policy for Developing Countries Augusto M. C. Sena Raimundo Eduardo S. Fontenele ABSTRACT This article focuses on the main growth policies arising from the new endogenous growth theory. A critical investigation of an important class of theoretical models is presented and relevance is given to variables known to be of crucial importance regarding growth policy’s design and implementation, mainly for developing countries. Levels of education, labor skills/learning, savings, provision of productive services (factors) by the government, and trade are key-variables coming from the new growth models investigated and these macroeconomic variables are shown to have strong appeal as growth policy’s design and implementation in developing countries are concerned. Key Words: Endogenous Growth, Government Policies, Growth Policies. 1. Introduction As admitted by Solow in his 1987 Nobel lecture, the development of a new growth model was, at that time, a reaction against the incompleteness of the Harrod-Domar-Hicks tradition, built up as a by-product of the great depression pervading the economic thinking preexistent during the Second World War period. Completeness, however, has been a moving target in the field of sciences. The logic of the Theory of Growth that emerged in the fifties, probably reflecting the long upswing of the American economy in the mid-sixties, started to be challenged in the last two decades of the current century. Completeness here should be understood not only in the sense of broadening the scope of the theory, while endogeneizing model’s parameters, but also as upgrading the assumptions in order to adequate these models to new stylized facts. The new endogenous growth theory is an instance of this sort of challenge that has improved upon Solow’s tradition, introducing endogenously into the theory the formation of knowledge, either as part of labor or as a broad notion of capital. The main purpose of this paper, therefore, is to review the most representative models of the new endogenous growth theory. In this sense the paper has no pretence to originality concerning model construction. Its main contribution is - altogether with the synthesis of the main results - the extraction of growth policy generated by these models, mainly to serve as guide to master policy design and implementation in developing countries. The role of government as a