What is the differentiate between the exogenous and endogenous approach.
The exogenous approach and endogenous approach are two different methods used in various fields, such as economics, sociology, and psychology, to explain the causes or outcomes of a particular phenomenon. Let's understand the differentiation between the two:
1. Exogenous Approach:
- In the exogenous approach, the focus is on external factors that are independent of the system or phenomenon being studied. These external factors are seen as the primary causes or drivers of the observed outcomes.
- Exogenous variables or factors are those that are determined outside the system and cannot be influenced or controlled by the system itself. They are considered to have a direct impact on the system.
- For example, in economics, when analyzing the impact of government policies on economic growth, the exogenous approach assumes that the government policies are externally determined and have a direct influence on the economy.
2. Endogenous Approach:
- In contrast, the endogenous approach focuses on internal factors or variables that are determined within the system itself. These internal factors are seen as the primary causes or drivers of the observed outcomes.
- Endogenous variables or factors are those that are determined by the system itself and are influenced by other variables within the system. They are considered to have an indirect impact on the system.
- For example, in economics, when analyzing the determinants of economic growth, the endogenous approach looks at factors such as investment, innovation, and productivity that are determined within the economy itself.
In summary, the key difference between the exogenous and endogenous approaches lies in the focus on external factors (exogenous) versus internal factors (endogenous) as the primary causes or drivers of the observed outcomes.