StudentShare solutions
Triangle menu

Solow Economic Model - Essay Example

Nobody downloaded yet
The graph on the right side is the representation of Solow's Economic model, where the characteristic parameter of production factor curves, an output is the function of labor and capital stock. The initial model keeps the labor force at a restricted level. Solow model is based on many other limitations, therefore it cannot be termed as a generalized model.
1. Surprisingly the rate of long-term return is determined beyond the parameters of the model. It is assumed the economy converges towards steady-state growth rate, which is dependent upon the rate of technological progress and growth rate of the labor force. The key prediction of Solow Model is that ultimately the economy of the poor countries will saturate with the economy of the rich countries. The results of such models have been practically validated on the average basis. Considering the economy of former poor country Japan, the Japanese economy has converged with the economy of rich nations, the convergent growth rates are still expected, even after the reaching point of convergence; leading to overflow of positive investment. Another example is of convergence within countries. In case of United States, the income levels of the Southern states of United States have tended to converge to the economic level of Northern states. The reliance of economic model on technological progress is another subject of criticism, had the productivity level is dependent upon the development in technological front, a significant rise in productivity would have been observed, but certainly there has been no economic revolution due to technological boom. The example of East Asian countries supports the claim, though the economies have risen significantly none of their rapid growth had been due to rising per capita productivity. ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Solow Economic Model Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.net/sociology/278121-solow-economic-model
(Solow Economic Model Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.net/sociology/278121-solow-economic-model.
“Solow Economic Model Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.net/sociology/278121-solow-economic-model.
  • Cited: 0 times

Summary

An essay "Solow Economic Model" claims that the varying capital output and capital-labor ratios allow increased capital intensity, well distinguished from technological innovation. The Solow model neglects the temporary slides of the business cycle and predicts the potential income basis…
Solow Economic Model
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Solow Economic Model"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

China's Economic Growth Appraisal through the Solow Model
The Solow model is also known as Solow-Swan growth model or the neoclassical growth model and the exogenous growth model. The model delineates economic models pertaining to long term growth within the framework of neoclassical economics.
5 pages (1250 words) Research Paper
Solow Growth Model
7). Economic growth leads to better living standards for the population and higher rates of employment. There are different theories that are used to explain economic growth which include classical growth theory, neoclassical growth models, endogenous growth theory and the Salter Model.
6 pages (1500 words) Essay
Macroeconomics. The Solow model
n represents growth in the labour force and as the growth takes place k=K/L here a clear case of decline is seen as L increases. This also implies that y=Y/L as L again increases. "Thus, as Lgrows, the change in k is now: where n*k represents the decrease in the capital stock per unit of labor from having more labor.
4 pages (1000 words) Essay
Economic Growth and Economic Fluctuations
These theories include the exogenous growth model as well as endogenous growth model. This paper will represent an examination of the viability of several governmental initiatives aimed determining the if certain policies will facilitate economic growth whereby a developing nation is able to catch up with already developed nations and to maintain a steady-state after catch up.
12 pages (3000 words) Essay
Solow Growth Model
He argued that an economy using exhaustible resources can still maintain high standards of living; technological progress was one of the factors that would help achieve high levels of technological growth and also the existence of capital accumulation. Solow gave three preposition about the model, first he assumed that technology was constant therefore E ct was zero, If K/L remains constant and D/L approached zero as the natural resources get depleted then Y/L will eventually approach zero.
4 pages (1000 words) Essay
Japans High Speed Growth Model and Extent Vietnam Followed the Model
To understand the post-war economic miracle, of Japan, in the economic terminology, we will bring the concept of neo-classical theory of economic convergence. This economic model concept brings out the reality of the Japan’s post-war economic miracle.
6 pages (1500 words) Essay
ISLM model
Therefore, at every point on IS curve total demand for goods and services in an economy at any particular time is equal to the total supply of output at that time, or in other words to say, total investment is equal to total saving. The LM curve on the other hand, shows
4 pages (1000 words) Essay
Paediatric case study (Indigenous community)
His abdomen is distended. His weight, height and psychomotor skills are below 10th percentile. He is suspected to have worms because he vomited some and his perianal region examination reveals scratching signs. He also looks mildly dehydrated. Examination also reveals
7 pages (1750 words) Case Study
Chinas economic growth through the Solow model

Based on the table presented in the paper as well as the results from the Solow augmented model it is clear that the Chinese economy is prospering like never before. Recently the Chinese economy overtook the Japanese economy to become the world’s second-largest economy and this in itself speaks volumes for economic efficacy in China.

5 pages (1250 words) Research Paper
Economic Growth - Solow Growth Model and Beyond
The factor accumulation entails the accumulation of capital, labor, as well as the population growth while the productivity factor entails progress in technology
7 pages (1750 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Solow Economic Model for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us