Endogenous Growth


DEFINITION of 'Endogenous Growth'

The notion that policies, internal processes and investment capital, rather than external factors, are chiefly responsible for economic growth. The idea of endogenous growth took root in the 1980s, partly as a response to criticism of the exogenous growth theory.

BREAKING DOWN 'Endogenous Growth'

Whereas believers in exogenous growth might argue that increased productivity relies on greater external technological aptitude, proponents of endogenous growth might counter that investments in technology will ultimately lead to greater technological aptitude and, as a result, greater growth.

Those who embrace the concept of endogenous growth often point to the differences in wealth that still exist between some industrialized and non-industrialized regions, something that exogenous growth proponents would argue evens out over time. In other words, in some instances, it appears that economic growth was cultivated and sustained from within a country itself.

  1. Exogenous Growth

    The belief that economic growth arises due to influences outside ...
  2. Neoclassical Growth Theory

    An economic theory that outlines how a steady economic growth ...
  3. Uneconomic Growth

    When economic growth produces negative external consequences ...
  4. Long-Term Growth - LTG

    An investing strategy or concept where a security will appreciate ...
  5. Growth Rates

    The amount of increase that a specific variable has gained within ...
  6. Elastic

    A situation in which the supply and demand for a good or service ...
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