Transcription of CHAPTER 3 EXOGENOUS AND ENDOGENOUS GROWTH
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CHAPTER 3 EXOGENOUS AND ENDOGENOUS GROWTH
41. University of Pretoria etd - De Jager, JLW (2004). CHAPTER 3. EXOGENOUS AND ENDOGENOUS GROWTH . Neo-classical theory , in all its forms, shows a strong tendency to reduce the economic complexity of the analysis, doing so by holding the institutional framework constant. Choi (1983:33). INTRODUCTION. In terms of the initial neoclassical theory described by Solow (1956) and augmented by others, sustained economic GROWTH occurs through an EXOGENOUS factor of production, that is, the passage of time. The neoclassical production function used in this theory relates output to factor inputs, which consist of the stock of accumulated physical capital goods (buildings, machinery, transport equipment, computers, and so on) and labour, which is regarded as only one type.
that “they are what most of the theory of economic growth actually explains”. The exogenous technical progress of the neoclassical theory fits into Kaldor's stylised facts (Van der Ploeg and Tang 1992:16). Kaldor’s (1961:178-179) “stylised facts” are as follows: • continued growth in the aggregate volume of production and in labour
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