The new growth theory holds that growth can persist indefinitely based on the major assumption that

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The new growth theory is based on the assumption that knowledge capital does not experience diminishing returns. This means that as more knowledge is accumulated, it can lead to sustained economic growth, as opposed to traditional theories that assume diminishing returns to capital. In other words, the more that is learned, the more potential there is for growth.

The New Growth Theory Holds That Growth Can Persist Indefinitely