Endogenous Growth Theory: Rise and Developments

The study is aimed at analysing basic features and developments of the new endogenous growth theory. The first section gives proof of the origins of this theory. The second section presents the basic ideas of the new modern (endogenous) growth theory, as they are developed by its founders and their followers. The endogenous theory is discussed as a new approach to measuring and analysing economic growth, giving rise to a variety of new issues, new determinants of the growth, in particular these concerning the transition countires’ economic growth. For the time being it is impossible or of no practical value to carry out direct measurement with the help of already existing models or new ones: firstly, because of the comparatively short period has passed since the beginning of the 1990s, and secondly, because of the mixed and not typical nature of the economic situation, that means transition from centrally planning to a market economy under the condition of a severe crisis. The economic performance of Bulgaria, however, shows in a specific way the importance of the new modern growth theory for explaining and promoting economic growth. The last section discusses some implications of the modern growth theory in the case of Bulgaria, in particular the human capital developments. Finally, concluding comments are given, concerning the two main subjects: the nature and prospects for the future of the new endogenous growth theory and the possibility for application of this theory in the case of Bulgaria making efforts to turn the corner towards economic growth.