ECONOMIC GROWTH IN THE SOLOW MODEL AND APPLICATIONS

Abstract

'The differences in the levels of real income among countries are due to differences in the growth rate of their products throughout great periods of time'.

Given these characteristics, one of the scholars’ main concerns over the economical growth and the development of economy lies in researching over the growth throughout different countries within the international context, i nc hoardraecrt teor iisdteicnst iofyf
the main resouces or determinants of the economies’ growth y thus to be able to respond to questions such as: Is one country’s growth low or high in relation to the development of other countries? What distinguishes a country from the rest in terms of economical
growth? And what is the perspective, on the long run, of an economy if it maintains a determined growth rate of its product?

The resources of growth are the issue of a great debate which is still under way. One of a great debate which is still under way. One of the basic conclusions of the model elaborated by Solow-Swan is that in a transitory regime we can observe a correlation between investment rate and growth rate, while on the long run, the growth rate does not depend on the investment rate.