IMPORTANCE OF ENDOGENOUS GROWTH

Endogenous growth theory maintains that economic

growth is primarily the result of internal forces, rather
than external ones. It argues that-improvements in
productivity can be tied directly to faster innovation and
more investments in human capital from governments
and private sector institutions.

Endogenous growth theory focuses on the role that

population growth, human capital, and the investment
in knowledge play in generating macroeconomic
growth, rather than exogenous factors where
technological and scientific process are independent of
economic forces.

Endogenous variables are important in econometrics

and economic modeling because they show whether a
variable causes a particular effect. Economists employ
causal modeling to explain outcomes by analyzing
dependent variables based on a variety of factors.