Question

can the neoclassical and endogenous growth model help us to explain the lack of growth in turly poor countries such as those in sub saharan africa?

Answer 1

According to the Neoclassical and endogenous growth model, poor countries lack the growth because these countries are facing many types of financial constraint which makes it difficult for the businesses to operate in these countries due to the lack of finance. Also, technology in these countries is not very advanced that will help will in increasing the productivity of the capital and labour as labour in these countries are not equipped with the latest and advanced technology and lack of technology can be easily explained by the low expenditure on the research and development. Endogenous growth model also states the lack of comparative advantage in these countries as the potential reason behind the lack of growth as these countries cannot take advantage of globalisation.