Abstract

Abstract The previous chapter dealt with the main theories of exogenous economic growth in some detail. As the name already suggests, in exogenous growth models the long- run economic growth rate depends solely on exogenous features of the economy, such as the rates of growth in the population or in labour-augmenting technological change. The objective of this chapter is to move from exogenous to endogenous growth. A model is said to give rise to endogenous growth if it predicts a long- run growth rate which depends on additional features (such as tax or subsidy rates, public infrastructure spending, private educational decisions) which may be affected by the government or the private sector.

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