Romer Model

The Romer model, developed by economist Paul Romer, explains how technological advancement drives economic growth. It emphasizes that knowledge and ideas are significant resources in the economy. Unlike traditional models that focus mainly on physical capital and labor, the Romer model suggests that investment in research and development (R&D) leads to new innovations. As these ideas are shared and used, they can enhance productivity and growth. Essentially, the model highlights the importance of knowledge as a catalyst for sustainable economic progress, suggesting that policies supporting education and innovation can significantly enhance a country's economy.