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Lecture 5 7 - (it is exogenously given in the Solow model...

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Endogenous Growth Theory In the Solow Growth Model (with technology), the steady state growth rates of y (output per capita) and k (capital per capita) are equaled to the rate of technological growth, g. However, how g is determined is not explained in the model
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Unformatted text preview: (it is exogenously given in the Solow model). • We want a model that explains how one can influence g, the rate of technological growth. Hence we can formulate economic policies that increase g. • Welcome to the world of “ Endogenous Growth Theory ”...
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