| Through the research on the endogenous growth theory, this paper addresses the following question: what is the determinant factor of the sustained long-run growth? In addition, should government do something for the long-run growth or how could government policy be used to promote economic growth?In economic research, a basic analysis framework is helpful to understand the theory itself. However, unlike the neoclassical economic growth theory, the endogenous growth theory till now has not established the general analysis framework accepted by most of the economists. In fact, the current research findings on the endogenous growth theory itself are consisted of different models created by those economists having similar opinion on the growth theory and are not clear enough.Current researches on the endogenous growth theory revealed that it is not the exogenous but endogenous variables (such as endogenous technological change) provide the engine for the long-run growth, and conducted in-depth analysis of one particular aspect of endogenous growth models such as the spillover effect of the knowledge, learning by doing, human capital investment, R&D, increasing returns, division of the labor and specialization and monopoly. All these researches undoubtedly, reflect one side of the endogenous growth theory; however, the conclusions are partial and not so clear, because they were done without a general framework.There do exist differences among the endogenous growth models, but still we could find some common points of the theory. The paper maintains it is feasible way for us to develop the research based on the division of labor. To some extent, the endogenous growth theory derives from the classical economics and fertilized by Adam Smith Marshall and Allyn Young's thoughts on the division of labor and the growth. Smith (1976) suggested that the division of labor can improve the productivity in three ways: first, improve the workers' skill (human capital accumulation); second, saving the workers shifting time from one job to another; finally, promoting the machines invention (material capital accumulation). We can interpret the above three ways with the contemporary economic theory term: learning by doing, human Capital and the endogeneization of technological progress.The endogenous growth literature pointed out that the long-run growth rate was determined by the growth rate of technology. But where does the technological progress come from? Obviously, it is related to the knowledge accumulation. As we know, human knowledge falls into the following two categories: knowledge accumulated from practices and experiences, and knowledge gained through independent education such as from school. As to the former, we can owe it to the division of labor inside the firms in the industrial economy. And the latter was affected by the social division of labor: family, school and the R&D department inside the firms obviously have active effect on knowledge accumulation. According to the endogenous growth model, knowledge (human capital) is generated as a product of profit-aimed entrepreneurs' consciousness investment (or a byproduct of unconsciousness investment), or comes from firms, families and individuals' consciousness or unconsciousness investment in human capital through leaming-by-doing, school education and training.The logic of the endogenous growth theory is that technological progress through the analysis of the process and the generate reason of technological progress. According to the endogenous growth model, technology is closely related to knowledge and human capital. On one hand, the model treated technology, knowledge and human capital as the same concept and focused on the increasing returns derived from the nature of technology ; on the other hand, the endogenous growth theory take knowledge (human capital) accumulation as the main resource generating technological progress.The logic of this paper is as following: The logic of this paper is as follows: there is positivefeedback relations...
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