Neoclassical Model

[CFA_silverbullet]

Hi,
i am a little confused on the neoclassical model. the book states that the model provides no explicit explanation of economic determinants of technological progress or how TFP changes over time in one paragraph. however, in another paragraph it states the long term growth of output depends on rate of growth of labor force and technology. are these two statement contradicting?
Thanks!

 

[S2000magician]

They’re not.
Classical growth and neoclassical growth are exogenous growth models: technological progress happens (outside the economy) and the economy responds to it.
I wrote an article on neoclassical growth that may be of some help here: http://financialexamhelp123.com/neoclassical-growth-theory/

 

[darshanP]

First, Neo’s primary focus is on estimating the economy’s Long-term sustainable growth that can be accomplished with three forces: labour, capital and technology.
Let me give you a link. Hope it will help. and if you’re still confused then go ahead and post your query.
http://financialexamhelp123.com/neoclassical-growth-theory/
Thanks.