New growth theory posits that economic growth is driven by increasing knowledge through creativity rather than increasing labor or capital. It states that GDP per capita rises continuously as people make choices to gain profits from new knowledge. Additionally, the theory emphasizes that growth increases as knowledge accumulation accelerates and that creativity enables limitless expansion of the economy by generating new resources and improving productivity beyond physical constraints.

1.  New growth theory includes that real GDP per person increases
due to choices people make based on profit gain from their
choices and that growth persist perpetually.
 It emphasizes that economic growth increase if new knowledge
increase.
 The ability to grow the economy by increasing knowledge rather
than increasing labor or capital creates opportunities for
boundless growth.

2.  According to new growth theory creativity and
knowledge are the main driven for economic growth.
 The new growth theory is based on the following golden
rules:
Freedom - creativity - technical progress- economic
growth.
 Creativity and knowledge not only improve the labor and
productivity but also extend resources.

3. Creativity and Labor: Without any addition to labor or
capital, the ideas added to labor increase the production.
production
Amount of work
C,s Farm
A and B,s Farm1.0t
1.5 t
200 Days

4. Quantity of labor (200 days)+ creativity = production
Value(300 Kilo)
Creativity Extends Resources: Creativity extend resources
by following way
1.Creativity rearranges resources
2. Creativity creates an artificial resource base

5. An hypothetical new growth theory curve

6. 0
10
20
30
40
50
No
Education
Primary Secondary Tertiary
1996
2010
Education Attainment of Labor Force
Source: Bangladesh Labor Surveys Various Years

7. 0
20
40
60
80
100
1996 2010
Changes of real GDP due to change of Knowledge & Creativity
Real GDP (1000
billion)
Year