What is Endogenous Growth

Growth that originates from within through cooperative learning.

Long-run economic growth at a rate determined by forces that are internal to the economic system. In the long run the rate of economic growth, as measured by the growth rate of output per person, depends on the growth rate of total factor productivity (TFP), which is determined in turn by the rate of technological progress. The neoclassical growth theory of Solow (1956) AU72: The in-text citation "Solow (1956)" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. and Swan (1956) AU73: The in-text citation "Swan (1956)" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. assumes the rate of technological progress to be determined by a scientific process that is separate from economic forces. Neoclassical theory thus implies that economists can take the long-run growth rate as given exogenously from outside the economic system. Endogenous growth theory challenges this neoclassical view by proposing channels through which the rate of technological progress, and hence the long-run rate of economic growth, can be influenced by economic factors.