I have been struggling with this for a long time now. I can remember the high level view but cannot get a question right when it comes to choosing which theory is being discussed.
Can someone share his view in terms of keywords tricks about each of those ?
That’d be really appreciated thanks !
Classical- Growth in real GDP is temporary- population explosion will occur bringing lvls back down to normal. Neoclassical- Growth in productivity can only be driven by technology improvement (I remember Neo-Matrix-Technology). It works for me lol. Endogeneous- Investing can increase growth. Endo means from within so think investing in yourself can increase growth. hope that helps a little.
Thank you for the fast reply ! That helps ! I think we can also add the “temporary” vs “permanent” keyword between Neoclassical and Endogenous
Thanks knight
Can’t help with keywords but some of the main characteristics and differences between neoclassinal and endogenous are:
Neoclassical theory:
Changes in savings, labor force growth rate or depreciation impact only the level of output per worker but do not impact growth rate of output per worker. Only TFP does.
Diminishing marginal returns of capital; increase in capital deepening or savings may help only in a short run.
Endogenous theory:
Capital include human capital, R&D and knowledge
=> no diminishing marginal returns of capital. Developed countries can continue to grow faster or at the same level as developing.
Increase in investments and savings increase economic growth.
If you haven’t seen this already:
http://financialexamhelp123.com/economic-growth-theories-synopsis/
thank s2000
My pleasure.
Thanks all ! I will dig the articles
Thought I had a pretty good understanding but S2000 helped a lot. Feel pretty confident with it now…
Thanks
Glad to hear.
^ Thanks, I’m sure the read will be good for 1 pt.