Solow Growth Model Essay Example | Topics and Well Written Essays - 1000 words

Solow Growth Model - Essay ExampleThe second assumption was that if you find expert progress and D/L is going down as we deplete the resources in a country, K/L may be going up because of capital accumulation, if capital accumulation was allowed to dole out place in an economy its possible for Y/L to remain unremitting or veritable(a) increase and this go out lead to economic addition.If the population remains to grow in the Malthusian adaptation, the Malthusian version is what Malthus discussed what would result from high population, he argued that in the case where population was left to grow without both control measures thence this would result to a complete depletion of resources, therefore if the population grows according to the Malthusian version then this dictates that Y/L will eventually approach zero. However if we earmark population constant and allow K/L to increase without a limit then Y/L will increase.If technological progress occurs in an economy such that c is not refer to zero then for any value of c its possible to calculate a growth yard of L that is accordant with Y/L remaining positive, therefore technological progress can resort for pop... However if we hold population constant and allow K/L to increase without a limit then Y/L will increase.If technological progress occurs in an economy such that c is not equal to zero then for any value of c its possible to calculate a growth rate of L that is consistent with Y/L remaining positive, therefore technological progress can compensate for population growth.Therefore according to Solow the factors that facilitate population growth include capital accumulation and technological progress, this are the factors that determine whether per capita income grows, decline or remain constant. (Scott (1989))Shortcomings of the Solows modelThe Cobb Douglas function he uses assumes constant returns to weighing machine also his model assumes that there exists constant elasticity of substitut ion among the factors of fruit used in the output process, this assumption allows the standard of living and economic growth to be maintained even if D/L approaches zero as long as K/L rises appropriately.He also assumes that every extension no matter the distance have similar opportunities with the current one, this is not consistent with human behaviour, and bulk today only care about their immediate gratification and not for generations to come. Other theories of economic growthThe classical school of economist which included Adam Smith, David Ricardo, Thomas Mathus and John Stuart Mill considered the main factors of production which included land, capital and labour but in the absence of technological advancement, they however recognised the employment of capital accumulation in economic development and