Deploying: Solow Growth Model: Initial Calculations

The Solow Growth Model is the simplest possible model capable of capturing anything about economic growth that I am aware of. It has:

  • a capital stock K, determined over time by the savings-investment share s, output Y, and a depreciation rate δ.
  • a labor force L, determined over time by its growth rate n.
  • an efficiency-of-labor E, determined over time by its growth rate g.
  • a production function determining output Y, depending on a parameter α capturing the relative capital orientation of growth as well as on K, L, and E.
  • That's it!

What can we then tell about economic growth from this very simple framework?

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