Economic Growth Theories

Economic growth theories explain how and why economies expand over time. Key theories include the classical view, which emphasizes the role of capital, labor, and resources; the neoclassical perspective, focusing on technological progress as a primary driver; and endogenous growth theory, highlighting innovation and human capital as catalysts for sustained growth. These models analyze factors like investment, education, and technology to understand how economies increase output, improve living standards, and face limits or capacity for expansion. In essence, they explore the mechanisms behind a nation’s ability to produce more goods and services over the long term.