Explain the role played by technological change in classical growth theory, neoclassical growth theory, and new growth theory
What will be an ideal response?
Technology plays a secondary role in classical growth theory. While technology might increase real GDP in the classical growth model, population changes drive real GDP per person back to a subsistence level of income. Technology also plays a secondary role in neoclassical growth theory. Neoclassical theory has technological change bringing about an increase in real GDP but diminishing returns brings an end to economic growth. The new growth theory emphasizes the role of technological change in creating continuous growth because entrepreneurs have an incentive to develop new technologies as a means of generating profits for themselves.
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Prisoners in World War II POW camps traded products for other products, a process referred to as
A) central planning. B) advantage exchange. C) barter. D) rationing.
Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital account changed?
What will be an ideal response?