The solow growth model

Biography[ edit ] Robert Solow was born in BrooklynNew Yorkinto a Jewish family on August 23,the oldest of three children. He was well educated in the neighborhood public schools and excelled academically early in life. At Harvard, his first studies were in sociology and anthropology as well as elementary economics. By the end ofSolow left the university and joined the U.

The solow growth model

For the scope of this paper, development refers to economic growth that leads to increased standard of living. The latter term itself is problematic, depending on whether it is measured simply in economic terms, like Gross National Product GNPor if it includes social and health measures, like education and life expectancy, which one finds in the Human Development Index HDI.

One assumes that social workers will not be satisfied with an end-point at econometrics, since human welfare depends on much more than the accumulation of wealth.

Thus the hazards of international studies and its interdisciplinary nature—we obtain both the strengths, as well as the weaknesses of narrowly focused fields.

Robert Solow - Wikipedia

Intuitively there is a strong relationship between wealth and quality of life. Especially in capitalist states, where most citizens consider wealth to be linearly correlated quality of life--or at least the capacity to consume is equated with happiness Baudrillard, The solow growth model, data supports these presumptions, as measured by several indices: Given these relationships, it is not unreasonable for the social worker to factor economic development into strategies for intervention at all levels macro, mezzo, and microif not even as a core factor.

Cox and Pawar highlight the importance of economic issues for social workers in dedicating a significant portion of their text to poverty and development. Intervention at these levels, as described by Cox and Pawar, can be imposed by agents external to the state, such as structural adjustment programs of the IMF or World Bank, they can be controlled by the state, such as specific government policies and structures, and finally, macro-level development can be externally assisted, in the form of foreign aid and investment.

The solow growth model

Local level development would refer to investment into small community projects, whether a small business, a health clinic, or a school, for example. While the latter was initially described as a model of reducing poverty, the results are frequently in the opposite direction.

Regardless of causation of poverty, Ferguson believes that social worker intervention can come at three levels, all related to increasing various forms of capital—human, financial and social. While the social worker understands that none of these three can become the sole site of intervention in hopes that it will automatically produce the others, economic theories of development focus on creating growth of financial capital with the belief that it will catalyze, and lay the foundation for the other two although recent economic models, as will be discussed, recognize coordination of all three will probably produce the strongest benefits.

At this time the UNDP encouraged technical support to low-income countries to further facilitate growth after it was realized that economic contribution alone was not sufficient for human-capital impoverished communities to grow.

International organizations began seeing the north-south economic divide, as well as becoming concerned about long-term impacts of capitalism on the environment. The Bretton Woods institutions expanded their efforts to bottom-up loans, rather than simply state-focused loans. The third state was a revival of classic Smith, as envisioned through Hayek.

The Reagan-Thatcher decade of the s was characterized by the beginning of the neoliberal hegemony, where the pendulum swung back to privatization, deregulation and liberalization of trade opening global markets. At this point the UN Secretary General, Boutros-Gali, asserted that development was a fundamental human right and united the triadic concepts of development, peace, and human security.

The Millennium Development Goals evolved into an internationally approved UN roadmap for achieving these three goals.

Solow's Model of Growth (With Diagram)

A more specific review is in order of these eras of development theory. Analyses of European growth after WWII indicated a fairly rapid and linear trajectory of economic growth that was built on a simplistic model of saving and investment. The final stage, 5 is characterized by mass consumption, which drives continued production, technological development, and job growth.

While intuitively attractive to the capitalist worldview and empirically supported at the time, it assumed a linear growth based on the two isolated variables of savings and investment.

The Marxist perspective became dominant in the ss as Euro-American sociology began to recognize the contribution of this once-taboo thinker.

BREAKING DOWN 'Neoclassical Growth Theory'

According to Wallerstein, different regions dominated the global economic system at different times in the previous and current centuries, making the rest of the world dependent on them for inclusion into profitable global markets. With the capacity to control the market rules, the hegemons were able to control the system, typically with economic sanctions, but failing that, with military force.

Multiple levels of dependency were required: Not coincidentally, peripheral states today were typically colonies, now abandoned and in disarray following the politicking of decolonization.A comprehensive, rigorous, and up-to-date introduction to growth economics that presents all the major growth paradigms and shows how they can be used to analyze the growth process and growth policy design.

Theories of Economic Growth: Adam Smith's Model of Economic Growth. Adam Smith's model of economic growth is more or less available in the different parts of Smith's well reputed book "Wealth of Nations" written in This model primarily deals with capitalistic economies and their process of economic growth.

What is the 'Neoclassical Growth Theory'?

Solow Growth Model Assume that the rate of depreciation of the capital stock is constant and equal to δ, then the change in the (per capita) capital stock is investment. 1 Working paper An estimation of the economic impact of chronic noncommunicable diseases in selected countries Dele Abegunde Anderson Stanciole.

Nov 26,  · The Solow Growth Model is a model of capital accumulation in a pure production economy: there are no prices because we are strictly interested in output = real income. Everyone works all the time, so there is no labor/leisure choice.

Le modèle de Solow est un des principaux modèles de la théorie de la croissance économique.Développé par Robert Solow, il est un modèle de l'économie néoclassique.

Solow–Swan model - Wikipedia