The Modern Economic Growth Model

What is it about?

The paper established the new economic growth model that incorporates both the economic variables and non-economic variables. The model is called the Latent Content (LC) model of economic growth. The latent means " hidden" and "content" means information. The model is established due to the lacking of existing a model that integrates both the economic and non-economic variables. The model is tested empirically and found to be fit for linearly fits. The paper used the data from 211 individuals. The LC model was tested for both linearly and non-linearity assumption and found that the model is most effective for linear relationship between capital, labor, psychological well-being and economic growth. However, the model is mediated by subjective well-being indicators, which are psychological demographic characteristics, physiological environmental factors and psychological economic factors.

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Photo by Andrew Neel on Unsplash

Photo by Andrew Neel on Unsplash

Why is it important?

The paper is important as established a new/modern economic growth that is solved a historical economic challenge for many economists. More important, the paper able to integrate the economic and psychology fields in a single economic model. The paper eliminated the policy dilemma on answering the economic problem on how choice the economic mixes for maximum economic outputs of an individual

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