Three Types of Endogenous Growth Models

As the representative of the neoclassical growth theories, Solow model predicts that economic growth in the long run is supported by exogenous technological progress. In this model there are three crucial economic variables, namely, the rate of saving, the rate of technological progress and the rate of population growth. The new growth theory initiated by Romer, on the other hand, emphasizes interpreting long term economic growth through internal variables. The author holds that this new growth theory could be considered an extension of Solows model, and identifies three major types growth models in the light of this theory: the non decreasing returns of accumulative factors, the endogenous technological progress, and the endogenous population growth/labor supply.