Exogenous Growth Model

The Exogenous Growth Model explains economic growth as driven mainly by factors outside the economy’s own systems, such as technological innovation or population growth, which are considered given and beyond the economy's control. It suggests that improvements in technology or increases in labor or capital lead to higher output (goods and services). However, since these drivers are assumed to evolve independently of the economy’s internal dynamics, the model predicts steady long-term growth without considering how economic policies or investments might directly influence growth rates.