Editing Endogenous growth theory (section)

== Criticisms ==<!-- This section is linked from [[Economics]] -->

One of the main failings of endogenous growth theories is the collective failure to explain [[convergence (economics)|conditional convergence]] reported in empirical literature.<ref>{{cite journal |last1=Sachs |first1=Jeffrey D. |first2=Andrew M. |last2= Warner |year=1997 |title=Fundamental Sources of Long-Run Growth |journal=[[American Economic Review]] |volume=87 |issue=2 |pages= 184–188 |jstor=2950910 }}</ref>

Another frequent critique concerns the cornerstone assumption of diminishing returns to capital. Stephen Parente contends that new growth theory has proved to be no more successful than [[neoclassical growth model|exogenous growth theory]] in explaining the income divergence between the [[developing nation|developing]] and [[developed nation|developed]] worlds (despite usually being more complex).<ref>{{cite journal |last=Parente |first=Stephen |title=The Failure of Endogenous Growth |journal=Knowledge, Technology & Policy |year=2001 |volume=13 |issue=4 |pages=49–58 |doi=10.1007/BF02693989 |citeseerx=10.1.1.471.9285 |s2cid=153333748 }}</ref>

[[Paul Krugman]] criticized endogenous growth theory as nearly impossible to check by [[empirical evidence]]; "too much of it involved making assumptions about how unmeasurable things affected other unmeasurable things."<ref>{{cite news |url=https://krugman.blogs.nytimes.com/2013/08/18/the-new-growth-fizzle/?_r=0 |title=The New Growth Fizzle |newspaper=New York Times |first=Paul |last=Krugman |date=August 18, 2013 }}</ref>