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The Solow–Swan model or exogenous growth model is an economic model of long-run economic growth. It attempts to explain long-run economic growth by looking at capital accumulation , labor or population growth , and increases in productivity largely driven by technological progress.
In the Solow growth model, a steady state savings rate of 100% implies that all income is going to investment capital for future production, implying a steady state consumption level of zero. A savings rate of 0% implies that no new investment capital is being created, so that the capital stock depreciates without replacement.
The Harrod–Domar model dominated growth theory until Robert Solow [c] and Trevor Swan [d] independently developed neoclassical growth models in 1956. [55] Solow and Swan produced a more empirically appealing model with "balanced growth" based on the substitution of labor and capital in production. [59]
Nobel laureate Robert Solow, credited as the founder of the modern model of economic growth, died on Thursday at the age of 99. Through his writings in the 1950s, Solow challenged traditional ...
In the Solow-Swan model, economic growth is driven by the accumulation of physical capital until this optimum level of capital per worker, which is the "steady state" is reached, where output, consumption and capital are constant. The model predicts more rapid growth when the level of physical capital per capita is low, something often referred ...
In the mid-1980s, a group of growth theorists became increasingly dissatisfied with common accounts of exogenous factors determining long-run growth, such as the Solow–Swan model. They favored a model that replaced the exogenous growth variable (unexplained technical progress) with a model in which the key determinants of growth were explicit ...
Growth model can refer to: Population dynamics in demography; Economic growth; Solow–Swan model in macroeconomics; Fei-Ranis model of economic growth;
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