Endogenous growth theory — a crash course

24 November, 2016 at 17:11 | Posted in Economics | 2 Comments

 
endo

2 Comments »

RSS feed for comments on this post. TrackBack URI

  1. In this illustration, both ideas could be the same and they squeeze down to one idea again.

    Otherwise endogenous growth is certainly how macro-economies can improve and become more prosperous. It is achieved when investment results in a greater value of output over a specific time than what is spent in producing this output.

    The danger is that when the improvement is in infrastructure only, the beneficiaries are land owners (and their banks) whose speculation in their sites has resulted in greater rents and sales prices becoming viable (for which the taxpayer foots the bill).

  2. Here is a financial market example.

    If you have 1 share price $25 of stock X with $100 cash in hands &
    I have 1 share price $20 of stock Y with $100 cash in hands &
    we exchange these stocks,
    then each of us could have 1 share price $200 of either stock X or Y still with $100 in hands.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.
Entries and comments feeds.