Search results
Results from the WOW.Com Content Network
A standard Solow model predicts that in the long run, economies converge to their balanced growth equilibrium and that permanent growth of per capita income is achievable only through technological progress. Both shifts in saving and in population growth cause only level effects in the long-run (i.e. in the absolute value of real income per ...
The efficient level of capital income tax in the steady state has been studied in the context of a general equilibrium model and Judd (1985) has shown that the optimal tax rate is zero. [6] However, Chamley (1986) says that in reaching the steady state (in the short run) a high capital income tax is an efficient revenue source. [7]
In the economic growth model of Robert Solow and Trevor Swan, the steady state occurs when gross investment in physical capital equals depreciation and the economy reaches economic equilibrium, which may occur during a period of growth.
Uzawa's theorem, also known as the steady state growth theorem, is a theorem in economic growth theory concerning the form that technological change can take in the Solow–Swan and Ramsey–Cass–Koopmans growth models. It was first proved by Japanese economist Hirofumi Uzawa. [1] One general version of the theorem consists of two parts.
A steady-state economy is not to be confused with economic stagnation: Whereas a steady-state economy is established as the result of deliberate political action, economic stagnation is the unexpected and unwelcome failure of a growth economy. An ideological contrast to the steady-state economy is formed by the concept of a post-scarcity economy.
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 ...
Robert Merton Solow, GCIH (/ ˈ s oʊ l oʊ /; August 23, 1924 – December 21, 2023) was an American economist and Nobel laureate whose work on the theory of economic growth culminated in the exogenous growth model named after him.
The Solow growth model is a model of economic development into which the Solow residual can be added exogenously to allow predictions of GDP growth at differing levels of productivity growth. The Balassa–Samuelson effect describes the effect of variable Solow residuals: it assumes that mass-produced traded goods have a higher residual than ...