Exogenous Growth


DEFINITION of 'Exogenous Growth'

The belief that economic growth arises due to influences outside the economy or company of interest. Exogenous growth assumes that economic prosperity is primarily determined by external rather than internal factors. According to this belief, given a fixed amount of labor and static technology, economic growth will cease at some point, as ongoing production reaches a state of equilibrium based on internal demand factors.

BREAKING DOWN 'Exogenous Growth'

The concept of exogenous growth grew out of the neoclassical growth model and the works contributed by Robert Solow. The exogenous growth model factors in production, diminishing returns of capital and technological variables to determine economic growth.

  1. Endogenous Variable

    A classification of a variable generated by a statistical model ...
  2. Endogenous Growth

    The notion that policies, internal processes and investment capital, ...
  3. Robert M. Solow

    Robert M. Solow is an American economist and recipient of the ...
  4. Neoclassical Growth Theory

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

    When economic growth produces negative external consequences ...
  6. Growth Rates

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