In the basic endogenous growth model, income can grow forever-even without exogenous technological progress-because:

Question

Quizplus · Accepted Answer

In the basic endogenous growth model, the key feature that allows income to grow indefinitely without the need for exogenous technological progress is the assumption that capital does not exhibit diminishing returns. This means that as more capital is accumulated, its marginal productivity does not decrease, allowing sustained economic growth.

In the Basic Endogenous Growth Model, Income Can Grow Forever-Even