Endogenous growth theory

from Wikipedia, the free encyclopedia

The endogenous growth theory , theory of endogenous growth , or new growth theory is a macroeconomic theory that explains how economic activities , technical progress results and as is clear from this advance long-term economic growth results. The endogenous growth theory was developed in the 1980s as a criticism and response to neoclassical growth models.

In the neoclassical growth models , long-term growth is determined exogenously ; H. the determining factors, such as the growth rate of technical progress and the increase in the workforce ( human capital ), lie outside these models. According to the criticism of the endogenous growth theory, these factors do not explain the origin of growth and are therefore of limited use. The endogenous growth theory, on the other hand, tries to overcome these deficits by trying to explain the growth endogenously , i.e. from the model. The technical progress function of Nicholas Kaldor can be viewed as a simple precursor to an endogenous explanation of growth or technical progress .

Today's endogenous growth theories see the main importance in the "production" of new technologies and human capital. Companies and inventors are encouraged to generate technical progress in order to have an advantage over their competitors by increasing their productivity . Part of this innovative knowledge is adopted by other economic actors, which in turn increases their ability to innovate . This mechanism increases the growth process. In contrast to the neoclassical (or Keynesian) growth theories, technical progress does not fall from the sky for free "like manna ", but has to be produced. Technical progress costs something.

In such models, the development of the economy depends on how expensive innovations are, how quickly “imitators” can adopt innovations and how, in turn, the innovators, the innovators, can protect themselves against all too rapid imitation. Therefore, they are not just growth models , they can also be used to explain business cycle fluctuations. Finally, the models can also explain why certain countries are permanently in the lead, but this depends on the assumptions about the “ parameters ”, ie how difficult or simple innovation and imitation are.

In the development of models for the endogenous growth theory, one of the central building blocks of neoclassics must be abandoned: the decreasing marginal productivity of production factors . Otherwise the growth process could not continue and external influences would have to stimulate it again and again.

Models

The following important information is missing from this article or section:
Models should be explained and sorted. New assumptions and methods of EWT must be described and criticism summarized.
Help Wikipedia by researching and pasting it .

According to the respective modeling of the assumptions, the models can be classified into two categories.

literature