Solow growth model . fundamental equation of Solow growth model #SolowModel #SteadyState

The Solow model believes that a sustained rise in capital investment increases the growth rate only temporarily: because the ratio of capital to labour goes up.
However, the marginal product of additional units of capital may decline (there are diminishing returns) and thus an economy moves back to a long-term growth path, with real GDP growing at the same rate as the growth of the workforce plus a factor to reflect improving productivity.
A 'steady-state growth path' is reached when output, capital and labour are all growing at the same rate, so output per worker and capital per worker are constant.
Neo-classical economists believe that to raise the trend rate of growth requires an increase in the labour supply + a higher level of productivity of labour and capital.
Differences in the pace of technological change between countries are said to explain much of the variation in growth rates that we see.

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[kuldeepdussad]

Please MAX video on various growth model like harrod domar growth model John Robinson growth model 1 a model with constant population kills all these model how different from when other mathematically as well as diagrammatically prove and how one model cut one another model?

[heenathakur]

Thank you sir please make a more videos on growth models

[VishalMajotra-rr]

Sir u provided complete model or in complete

[kuldeepdussad]

From which book this have been taken out n

[rahuldevmeher]

Anyone here is preparing pg entrance exam??

[kangkitabaruah]

If the question comes like derive the fundamental equation of solow model can we write dis answer?