Question

According to the Solow growth model, what are the two general ways a country can grow...

According to the Solow growth model, what are the two general ways a country can grow in the long run? Explain each in complete detail, and use graphs to demonstrate each.

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Answer #1

According to the Solow growth model, the two general ways a country grow in the long run occurs within the framework of neoclassical theory and the inhibitors of long-run growth can be capital accumulation, labor growth, and technological productivity. The implication of the model implies that the economy, in the long run, grows at the constant technological progress level which is the steady-state growth while shifts in saving and population can cause only level effect changes.

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