Neoclassical Growth Theory
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Definition of 'Neoclassical Growth Theory'
An economic theory that outlines how a steady economic growth rate will be accomplished with the proper amounts of the three driving forces: labor, capital and technology. The theory states that by varying the amounts of labor and capital in the production function, an equilibrium state can be accomplished. When a new technology becomes available, the labor and capital need to be adjusted to maintain growth equilibrium.
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Investopedia explains 'Neoclassical Growth Theory'
This theory emphasizes that technology change has a major influence on economic growth, and that technological advances happen by chance. The theory argues that econonomic growth will not continue unless there continues to be advances in technology.
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Search results for 'Neoclassical Growth Theory'
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http://www.investopedia.com/university/macroeconomics/macroeconomics1.asp
... Smiths work to solidify classical economic theory. ... Since neoclassical economists
believe the market is always ... macroeconomics focuses on the growth of supply ...
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http://www.investopedia.com/articles/economics/09/wage-stickiness.asp
... In times of growth, wages should rise because demand ... Neoclassical economists who
believe in efficient markets don't ... The problem with Keynes' theory is that it ...
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