Endogenous Growth Theory

AAA

DEFINITION of 'Endogenous Growth Theory'

An economic theory which argues that economic growth is generated from within a system as a direct result of internal processes. More specifically, the theory notes that the enhancement of a nation's human capital will lead to economic growth by means of the development of new forms of technology and efficient and effective means of production.

INVESTOPEDIA EXPLAINS 'Endogenous Growth Theory'

This view contrasts with neoclassical economics, which contends that technological progression and other external factors are the main sources of economic growth. Supporters of endogenous growth theory argue that the productivity and economies of today's industrialized countries compared to the same countries in pre-industrialized eras are evidence that growth was created and sustained from within the country and not through trade.

RELATED TERMS
  1. Exogenous Growth

    The belief that economic growth arises due to influences outside ...
  2. Kenneth Arrow

    An American neoclassical economist who won the Nobel Memorial ...
  3. Economics

    A social science that studies how individuals, governments, firms ...
  4. Classical Economics

    Classical economics refers to work done by a group of economists ...
  5. Globalization

    The tendency of investment funds and businesses to move beyond ...
  6. Human Capital

    A measure of the economic value of an employee's skill set. This ...
Related Articles
  1. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  2. Economics Basics
    Economics

    Economics Basics

  3. The Uptick Rule Debate
    Active Trading Fundamentals

    The Uptick Rule Debate

  4. A Clear Look At EBITDA
    Markets

    A Clear Look At EBITDA

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center