What is an exogenous growth?
exogenous growth is a type of theory or belief that the growth that occurs in the economy is influenced by what is happening outside this economy. The same general concept can be used on an individual company, understanding that factors outside the direct inspection of this company will have some effect on the economic growth that the company experiences. The general idea of exogenous growth has been developed in the mid -20th century and takes into account the foundations of neoclassical growth theory and at the same time expand the concept to allow events and scenarios relevant to economic growth in the current environment.
The general concept of exogenous growth is contrasted with another economic theory, known as endogenous growth theory. While the first focuses on the idea that external factors affect the level of growth in the economy, the latter is the understanding that these are internal factors that primarily affect what the types of growth experience within the economy. Both theories allow the potential of what is called uneconomical growth, whichIt means that the economy can experience a period in which there is no positive growth.
A number of factors are considered part of the theory of exogenous growth. Attention is paid to all types of factors, including work and changes or innovation in technology that may occur, security of raw materials used in the production process, and even offers and demand for produced goods. Factors such as government incentives in the form of tax cuts will also be charged, as well as any government actions that may have an adverse impact on the production process itself.
Some factors are considered a short -term impact on exogenous growth, such as temporary tax incentives that can only apply for anor or so. Other factors such as technological changes can be considered external factors that have a long -term impact on the amount of economic growth that is experiencedOde or even in industry or individual society. The rate to which the idea of exogenous growth can be applied to a specific economic situation is a problem that supporters of various economic theories are still discussed, especially those who consider external factors to be a certain impact on the economy, but do not serve as a primary impact on the direction of this economy.