ELEMENTS OF THE NEOCLASSICAL GROWTH THEORY

Abstract

One of the relevant components of the contemporary economic science is the economic growth theory, the economic background of the time leading to new guidelines of the research. The neoclassical growth theory - the core of modern analysis - explains how the capital accumulation and technological changes affect the economy, significant for the analysis of the economic growth process being the Solow’s neoclassical growth model. The paper brief describes the elements of the economic growth model developed by Solow, both for the situation when it allows the explanation of extensive growth and that wherein the growth is of intensive nature, as a result of the intervention of exogenous technical progress – a determinant of factors productivity growth. It is highlighted the importance of the exogenous neoclassical model, proposed by Solow, who showed the determinant role of the technical progress in the economic growth phenomenon.