Can anybody provide nice concise definitions for the these two growth theories in the equity section? What are the core differences between these two growth theories?
neo-growth drops to required rate of return due to lack of technological advance endo-growth keeps on continuing b/c when growth slows people invent new technologies to keep growth going
neo- growth- technology will increase economic growth up to a point until returns reach a target rate of returns. endogenious also same as new growth says- no diminishing return to innovation so though returns will diminish as returns reach the target rate as suggested by neo-growth, low returns will trigger more innovation to develop new technogies which will further increase economic growth.
Endogenous - infinite growth. no diminishing return to knowledge. driver = profit mgn) neoclassical - finite growth by rate of return. tech is suprise/non control event.