Augmented Solow Growth Model

Augmented Solow Growth Model

Augmented Solow Growth Model

In contemporary economics, a model is a scientific depiction of some feature of the frugality. The Solow model basis is around two equalities, a capital accretion equation, and the production function. A model consists of various equations that describe the relationship among a collection of variables whose values are determined within the model itself; in other words called endogenous variables (Gruescu, 2007).

The Solow model appeals to variances in venture rates and population growth rates and to exogenous variances in technology to elucidate alterations in per capita proceeds. Furthermore, investing more and having lower population growth rates, allows countries to accumulate more capital per worker and thus increase labor productivity (Neuhaus, 2006).

————–Middle of paper—————–

As economies amass capital and become wealthier, they dedicate more capitals to capitalize in people. They do so by improving schooling, health care, and on-the-job training. This investment increases the human capital, which in turn increases productivity. The Solow model basis is around two equalities, a capital accretion equation, and the production function.

Empirical results support the notion that contemporary income differences are highly influenced by both the year of the take-off and post take-off influences captured by the neoclassical growth model. By adding the onset of the fertility transition to the neoclassical growth model, we improve the empirical fit considerably.

Reference List

Barro, R. J. (2008). Macroeconomics: a modern approach. Mason, Thomson.
Bodvarsson, O. B., & Van Den Berg, H. (2013). The economics of immigration theory and policy. New York, NY, Springer. http://dx.doi.org/10.1007/978-1-4614-2116-0.

Do you need to sample other essays ?Check out all our blog posts where we have a wide variety of topics e.g. How technology today has blurred the lines between private and public

Are you ready to order a custom essay from us ? Place your order with us today.

  • Length: 1548 Words (4)
  • Rating:Powerful Essays
  • Price: $20