Discussion: Endogenous Verses Exogenous Growth Theories
In neoclassical growth models, the sources of growth are usually "technologies." Such theoretical versions hence can describe the way the economy develops, but not why it grows. To overcome this shortcoming, many growth models are developed that make expansion an endogenous variable. Compared to neoclassical growth theory, endogenous growth theory asserts that policy steps (for example, subsidies on R&D and schooling) can get an increase Ongoing expansion rate of a market.
In the essay develop a summary of endogenous and exogenous growth theories.
Analyze the impact of government policy on the long-term growth rate of an economy.