Theoretical Grounds of Economic Growth

Economic growth bears importance for any country with different levels of development. It is seen that various theories of economic growth give a different importance to technological development and human capital. Theories of economic growth referred to as exogenous economic growth theories, which assume technological development and human capital as determinants of economic growth and propose that they are not affected by economic variables, consider them as the main determinants of economic growth in the long run While these models support technological development as the main source of economic growth in the long run, they have deficiencies in explaining the sources of technological development. These deficiencies are overcome by endogenous growth theories. Endogenous growth theories consider technological development as a variable that is affected by the decisions of economic units and internalize them. The aim of this study is to explain the thoretical grounds of exogenous and endogenous economic growth theories and stress the differences based on their nature.