New growth theory economists believe that:
I. Economic growth can continue as long as we keep finding new ideas.
II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Question

Quizplus · Accepted Answer

New growth theory emphasizes the role of ideas and knowledge in driving economic growth, suggesting that as long as new ideas are generated, growth can continue indefinitely. It does not necessarily focus on the diminishing returns of capital as a primary concern.

New Growth Theory Economists Believe That