The Solow Model of Economic Growth

The production of goods by a country depends on the capital available for investment and the number of workers in the labor force. Let Q be the production output, K the capital, and L the labor force; then Q is a function of K and L: Q = f (KL,) . In this Minimodule, you will examine the development of a differentialequation model for predicting Q, which was developed by Robert Solow [I9561 and is discussed in Chiang [1974,497-5011. You will be involved in all phases of modeling, from the assumptions phase through the solution, analysis, and interpretation phases.