This chapter examines the models of endogenous growth, in which the rate of growth is sensitive to the rate of factor accumulation, and technical progress is an economic activity that results from rational decisions by households and firms. It evaluates the simplest model of endogenous growth with maximizing consumers. This model is called the AK model. It also studies a seminal model called the Romer model, in which technical progress occurs through returns to diversification among horizontally differentiated products. In addition, it analyzes a different model, wherein the main mechanism is that the productivity of each production process can be improved via research. The chapter then assesses the issue of the scale effects.
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