Macroeconomics: What is diminishing marginal returns of factors? Why does endogenous growth theory advocate giving up this hypothesis to some extent?

Output is income, and output is a function of elements. Declining marginal income of factors means that the output per unit of factor input increases is reduced. For example, the increase of the first unit's factor input leads to the increase of 10 unit, while the increase of the second unit's factor input only increases the output by 9 units, and so on, but the increase of general factor input will increase. Mathematically, the first derivative of the production function is greater than zero and the second derivative is less than zero. There are many reasons for the diminishing marginal income of factors, and the specific reasons of different factors may be different. For example, for fixed capital such as plant and equipment, depreciation may be the invested increasing function.

Solow model explains the sustained growth of the whole economy with the production function of diminishing marginal income of labor and capital investment, but it can't explain the sustained growth of per capita output, so it assumes that there is technological progress, but it can't explain where it comes from. Insert an interesting joke about Man Kun's macroeconomics:

A chemist, a physicist and an economist are stranded on a desert island at the same time. They tried to find a way to open cans.

The chemist said, "Let's put the jar on the fire until it bursts."

"No, no," said the physicist. "Let's throw the jar on the rock from the top of the tall tree."

"I have an idea," said the economist. "First of all, let's assume that there is a can opener. . "

This joke tells us that economists sometimes use assumptions to simplify problems-sometimes they simplify them too much.

Endogenous growth theory tries to explain the sustained growth of per capita output with technological progress. At this time, technology is not a given exogenous variable, but an endogenous variable that causes output changes. When technology is introduced into endogenous variables, the law of diminishing marginal returns of labor and capital may not exist. For example, the same adult, in ancient times, he may only plow one acre of land a day, but in modern times, he can plow one hundred acres of land with a tractor.