Economic growth models have evolved significantly over the centuries, shifting from classical theories to more comprehensive frameworks that consider various internal and external factors. Initially, economists like Adam Smith and David Ricardo focused on factors such as capital accumulation and labor increases to explain economic growth. Their models assumed that growth was primarily driven by external factors and would eventually stabilize due to diminishing returns. In the mid-20th century, the Harrod-Domar model introduced the concept of investment in physical capital as the key driver of economic growth, emphasizing that savings rates and capital productivity determine the growth rate. This model, however, was soon critiqued for its lack of consideration for technological improvements and the quality of capital and labor.

The introduction of the Solow-Swan model in the 1950s marked a pivotal shift. It recognized technology as a critical factor in economic growth, independent of capital and labor. The Solow model proposed that long-term economic growth is primarily driven by technological progress, which helps overcome diminishing returns to capital and labor. However, the most significant advancement in economic growth theories came with the development of endogenous growth models in the late 20th century by economists such as Paul Romer and Robert Lucas. These models argue that economic growth is generated from within the system through factors like innovation, knowledge accumulation, and human capital development. Unlike exogenous models where technology and progress are external factors, endogenous models see them as outcomes of economic activities and policy decisions, thus providing a framework where policy interventions can significantly impact long-term growth. These models have significantly influenced contemporary economic policies, emphasizing the importance of investing in education, research and development, and innovation to foster sustainable growth. They suggest that such investments not only contribute to immediate economic expansion but also ensure the continuous development of new technologies and improvements in productivity, driving growth from within the economy