Endogenous and exogenous growth theories.

May 13th, 2015
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University of St. Thomas
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The exogenous economic theory is a neoclassical perspective of the well renowned economist Robert Solow.

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Endogenous and exogenous growth theoriesComparison between Endogenous and exogenous theoriesNeoclassical perspective and Exogenous Economic theoryThe exogenous economic theory is a neoclassical perspective of the well renowned economist Robert Solow. The exogenous theory makes the assumption that economic growth primarily depends upon the external factors such as political turmoil or stability, natural disasters, technological advancements and international market equilibrium. According to exogenous theory, if all external factors are made static, for example if no technology developments add up to the system of an organization or a state, the economic growth will cease after touching a particular tipping point. This school of thought believes that Organizational policies, systematically improved infrastructure and other internal factors play no role in enhancing capitals and economic performances. External factors greatly impact the equilibrium factor between demand and supply upon which basic ideology of economic growth put rest [Exogenous Growth (2014)].Classical perspective and Endogenous Economic theoryIn contrast with the neoclassical beliefs in economics, most famous and relevant classical theory of economic growth is endogenous economic growth theory. Endogenous theory believes in internal factors such as investments and brain stormed organizational policies to be the prime contribution in economic expansion of the state or any other organization. O

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