compare how exogenous and endogenous growth models view capital as a factor of input

Expert Solution

Exogenous growth model says that economic growth stems on account of influences external to the economy/ firm of interest. Exogenous growth presumes that economic prosperity is mainly established by factors that prevail outside of the given firm / economy as opposed to internal factors. Both exogenous & endogenous growth concepts are part & parcel of the neoclassical growth frameworks.

The notion of exogenous growth grew from the neo-classical growth framework. This model factors in production, savings rates, diminishing returns of capital & technological variables to ascertain economic growth. The exogenous growth framework varies from the endogenous growth model in that the former needs forces external to capital investment & a growing working populace to continuously grow an economy. The endogenous model implies that an economy can continue to indefinitely grow utilizing already available items like prevailing technology or educational investment.

Rahul Sunny answered 2 years ago

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