In your judgement, how useful (or not) is the Solow model as an analytic tool for...

In your judgement, how useful (or not) is the Solow model as an analytic tool for understanding the differences in developing and developed countries?

Expert Solution

Robert Solow developed the neo-classical theory of economic growth and Solow won the Nobel Prize in Economics in 1987. He has made a huge contribution to our understanding of the factors that determine the rate of economic growth for different countries.

Growth comes from adding more capital and labour inputs and also from ideas and new technology.

Developing countries are now the engine driving the global economy, accounting for around two-thirds of global growth

There are many differences across countries but there are some common elements to countries that have grown continuously. They have stable governments that pursue prudent economic policies, provide essential infrastructure and services, and take a long-term perspective. They use the opportunities provided by global markets and they have a dynamic and competitive private sector"

Rahul Sunny answered 2 years ago

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