Solow Growth Model Presented by Ruqiyya,Ghazala,Jamila and Fareen

History. o Robert Merton Solow o August 23,1924 o New York o Nobel prize in 1984 Definition; The neoclassical growth model is a macro model in which the long-run growth rate of output per worker is determined by an exogenous rate of technological progress.

Equation; Q= A(t) F (K,L) Q= Output K =Capital L=labour A(t)= Level of technology, knowledge,efficiency of work Assumptions o Continuous time. o Single good produced with a constant technology. o No government or international trade. o All factors of production are fully employed. o Labor force grows at constant rate n=L/L

Assumptions o Continuous time. o Single good produced with a constant technology. o No government or international trade. o All factors of production are fully employed. o Labor force grows at constant rate n=L/L

Solow steady state equilibrium

Impacts; Prime impacts of the Solow growth model are seen in Hong Kong, Taiwan, Singapore and Japan. In us economy the growth rate increased from 8.5 to 12.5