Technological Economy

Endogenous Growth and Human Capital A significant portion of my analysis focuses on the "endogenous" nature of technology. Unlike early models that treated technology as an "exogenous" shock (something that happens outside the economic system), my view emphasizes that growth is generated from within the system through intentional internal processes. This mirrors the theories of Paul Romer, who argued that ideas are "non-rivalrous" goods—meaning one person’s use of a technology does not prevent another’s use—which leads to increasing returns to scale. My view posits that for technology to drive development, a nation must possess the "absorptive capacity" to utilize it. This requires a robust education system and a skilled workforce capable of operating and improving upon new tools.The mathematical representation of this relationship often follows a production function where output Y is a function of technology A, physical capital K, and human capital L:Y=A⋅f(K,L)In this equation, A represents the efficiency with which K and L are utilized. My view argues that A is the most critical variable for developing nations seeking to escape the "middle-income trap."