Modern growth theories are more optimistic than Neoclassical growth theories because the former emphasize the unlimited potential of .

Question

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Modern growth theories, such as endogenous growth theory, emphasize the role of knowledge-driven technological change in stimulating economic growth. They argue that investments in education, research and development, and innovation can lead to sustained economic growth and even make up for diminishing returns to physical capital. Therefore, modern growth theories are more optimistic than neoclassical growth theories, which emphasize the role of factors such as labor and capital in economic growth.

Modern Growth Theories Are More Optimistic Than Neoclassical Growth Theories