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Solow Growth Model | Part 1 | Model Intro & Solution | Intermediate Macroeconomics
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In this video, I introduce a baseline version of the Solow growth model. The baseline model does not account for population growth or technological progress.
Chapters
0:00 - Introduction and Rambling
1:17 - Equations of the Solow Model
5:19 - Per Capita Variables and Equations (Useful!)
9:34 - Solution to the model
13:02 - Matlab Simulation
There are four primary equations for this version of the Solow model: the production function, capital accumulation, the resource constraint, and resource allocation (investment equals savings). I explain these equations in detail, then I rewrite them in per capita form. Writing the Solow model in per capita terms is useful, especially once population growth is introduced into the model.
The solution is a path for the endogenous variables of the model. I also present a numerical solution to the model using Matlab. Feel free to replicate my code and try it yourself.
Chapters
0:00 - Introduction and Rambling
1:17 - Equations of the Solow Model
5:19 - Per Capita Variables and Equations (Useful!)
9:34 - Solution to the model
13:02 - Matlab Simulation
There are four primary equations for this version of the Solow model: the production function, capital accumulation, the resource constraint, and resource allocation (investment equals savings). I explain these equations in detail, then I rewrite them in per capita form. Writing the Solow model in per capita terms is useful, especially once population growth is introduced into the model.
The solution is a path for the endogenous variables of the model. I also present a numerical solution to the model using Matlab. Feel free to replicate my code and try it yourself.
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