Exogenous growyh model solow

Exogenous growyh model solow - Exogenous growth model The...

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Exogenous growth model The Exogenous growth model, also known as the Neo-classical growth model or Solow growth model is a term used to sum up the contributions of various authors to a model of long-run economic growth within the framework of neoclassical economics. Extension to the Harrod-Domar model Solow extended the Harrod-Domar model by: * Adding labor as a factor of production; * Requiring diminishing returns to labor and capital separately, and constant returns to scale for both factors combined; * Introducing a time-varying technology variable distinct from capital and labor. The capital-output and capital-labor ratios are not fixed as they are in the Harrod-Domar model. These refinements allow increasing capital intensity to be distinguished from technological progress. Short run implications * Policy measures like tax cuts or investment subsidies can affect the steady state level of output but not the long-run growth rate. * Growth is affected only in the short-run as the economy converges to the new steady state
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This note was uploaded on 03/31/2010 for the course ECONOMICS 322 taught by Professor H during the Spring '08 term at Kadir Has Üniversitesi.

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Exogenous growyh model solow - Exogenous growth model The...

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