Endogenous growth theory

The endogenous growth theory or new growth theory is a technology developed in the 1980s, growth theory. It is to critique and response to the neo-classical growth models.

In the neoclassical growth models, the long-term growth is determined exogenously, that is the determining factors such as the growth rate of technical progress and the growth of the labor force (human capital ) are outside these models. These factors, as the criticism of the endogenous growth theory, but do not explain the origin of growth and are thus only limited useful. The endogenous growth theory, however, tries to overcome these shortcomings by endogenous growth, so trying to explain out of the model. As a simple precursor of an endogenous explanation of growth and technical progress, the technical progress function of Nicholas Kaldor can be viewed.

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

The development of the economy is in such models depends on how costly are innovations as quickly " imitators " can take on innovation and how, in turn, the innovators, the innovators, to protect themselves against too rapid imitation itself. Therefore, it is not just growth models, but they can also be used to explain economic fluctuations. Finally, the models can explain why certain countries are permanently in management also, but this depends on the assumptions about the "Parameters" from, so how difficult or easy innovation and imitation.

In the development of models for endogenous growth theory forced a key component of neoclassicism is giving up: the diminishing marginal productivity of factors of production. Otherwise, the growth process could not continue and external influences should encourage these again and again. According to the model of this assumption, the models can be classified into two categories. The first explains the growth by means of a variable technology parameter that has to be elaborate. These include the model and Romer - Aghion Howitt model. The second group model (AK model, Uzawa -Lucas model and spillover models ) based economic growth despite constant technology.

Models

• Jones model
• Aghion - Howitt model
• AK model
• Uzawa -Lucas model
• Spillover models