Exogenous Growth Theory

Exogenous Growth Theory is an economic concept that explains how a country's long-term economic growth is influenced by factors outside its economy. It suggests that advancements in technology and increases in resources, such as labor and capital, drive growth. These external changes boost productivity and innovation, leading to higher output. Unlike endogenous growth theory, which focuses on factors within the economy, exogenous growth emphasizes the role of external forces, like new inventions or government policies, as key drivers of sustainable economic development over time.