growth model
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Title: growth model

Essay Details:

Subject: Miscellaneous
Author: Claudia F
Date: June 22, 2017
Level: College
Grade: A
Length: 1 / 175

Essay text:

[edit] Extension to the Harrod-Domar model Solow extended the Harrod-Domar model by: * Adding labor as a factor of production; * Requiring diminishing returns to labor and capital separately, and constant returns to scale for both factors combined; * Introducing a time-varying technology variable distinct from capital and labor. The capital-output and capital-labor ratios are not fixed as they are in the Harrod-Domar model. These refinements allow increasing capital intensity to be distinguished from technological progress. [edit] Short run implications * Policy measures like tax cuts or investment subsidies can affect the steady state level of output but not the long-run growth rate...

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