From Wikipedia
In economics, endogenous growth theory or new growth theory was developed in the 1980s as a response to criticism of the neo-classical growth model. The endigenous growth theory holds that policy issues can have an impact on the long-run growth rate of an economy. For example, subsides on research and development or education increase the growth rate in some endogenous growth models by increasing the incentive to innovate.
In neo-classical growth models, the lon-run rate of growth is exogenously determined by either assuming a savings rate (the Harrod-Domar model) or a rate of techical progress (solow model).
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