Describe the Mankiw-Romer-Weil extension to the neoclassical model to include human capital. Explain why diminishing returns to capital do not take place in the AK model.

The Mankiw-Romer-Weil (MRW) model is an extension of the neoclassical growth model that incorporates human capital alongside physical capital and technological progress. This model builds on the Solow-Swan model, which explains long-term economic growth through the accumulation of physical capital, labor, and technological progress. The MRW model seeks to explain the variation in growth rates across countries by recognizing the role of human capital—defined as the skills, knowledge, and abilities of the workforce—in promoting economic development.

In the traditional Solow model, economic growth is driven by the accumulation of physical capital, labor, and exogenous technological progress. However, it assumes diminishing returns to both capital and labor, which means that as capital increases, its marginal contribution to output declines. This assumption restricts the ability of economies to maintain _________ _____ ____ ____ ______ _________ _____ __________ _________ _____.
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