Force of Long- Run Economic Growth: Technology Progress or New Consuming Product

摘要

In economic growth theory, force of long-run economic growth is considered to be capital accumulation, exogenous then endogenous technology progress. Economic aggregate cannot be represented as a production function of only production factors because it is related to both demand and supply. In this study, economic aggregate is divided into business revenue of growing product and that of mature product. Growing product provides surplus demand and mature product consumes surplus demand. Economic aggregate depends on innovation, the amount of growing products. In addition, two kinds of innovation, invention of new consuming products and technology progress play different role in economic growth. The former brings final demand increase and the latter leads to production cost reduction. Technology progress often exceeds new invention of consuming product because of strong externality.