The neoclassical growth theory is based on a subsistence real wage rate.

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The neoclassical growth theory, developed by Solow (1956) and Swan (1956), does not base its model on a subsistence real wage rate. Instead, it focuses on how the accumulation of capital, labor force growth, and technological progress affect economic growth, assuming diminishing returns to capital and labor, and a constant returns to scale production function.

The Neoclassical Growth Theory Is Based on a Subsistence Real