In developing this growth model, the new growth economists broke with the two mainstream Neo wings because the dissident growth economists were unwilling to accept the inevitability of economic convergence or reversion to the mean, as specified by the Two Neos. Mainstream Neo economics both accepted that over time, the advanced economy would decline and sooner or later the emerging economies would grow and “converge” to some sort of rough equality with the developed world. The Neo mainstream, therefore, accepted the notion of an inevitable decline and the impossibility of creating a virtually perpetual growth machine. Inevitable decline and the impossibility of perpetual growth was unsatisfying to the new generation, in part, because the young rebels asked a second question.  Growth economists believed that under some conditions Mainstream Neo economics was wrong, incorrect, faulty in at least one respect. The growth economists believed (and they felt they mathematically proved) that  growth by one firm or nation could be maintained indefinitely, condemning all competitors or less developed nations into a more or less permanent inferiority.

What’s the Theory Behind Innovation and the Knowledge-Based Economy | Journal of Applied Research in Economic Development Saturday, April 26, 2014 @ 1:07pm | Modified