19-13 Endogenous growth theory ..recognizes that there may be significant externalities to capital known as 'endogenous'growth theory because it suggests that growth may depend on parameters than can be influenced by private behaviour or public policy governments should subsidize human and physical capital formation Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITYEconomics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 19-13 Endogenous growth theory • … recognizes that there may be significant externalities to capital • known as ‘endogenous’ growth theory because it suggests that growth may depend on parameters than can be influenced by private behaviour or public policy – governments should subsidize human and physical capital formation