Emirical Analaysis of Solow-Swan Growth Model

  • Darko Lazarov
  • Risto Fotov
  • Dusko Josheski

Abstract

Long-term rate of economic growth in the Solow-Swan model is determined by exogenous (previously given) variables, and as a result, in the model, percapita variables k, c and y grow only to a point where the economy reaches the steady-state level. From this we can conclude that the Solow-Swan model provides an opportunity to grow the economy, but in the long run. To explain this fact we will use one example. Suppose that the economy is in a state where capital per worker k is below the value in the steady-state condition, in which case capital and output per worker will grow, but only along the transition path to steady-state. On the other hand, when the goods on physical capital per worker exceeds the value of capital per worker in steadystate condition, then the economy has seen a decline in capital and output per worker along the transition path to steady-state level.
Published
May 20, 2013
How to Cite
LAZAROV, Darko; FOTOV, Risto; JOSHESKI, Dusko. Emirical Analaysis of Solow-Swan Growth Model. Yearbook - Faculty of Economics, [S.l.], v. 3, n. 1, p. pp.147-156, may 2013. ISSN 1857- 8632. Available at: <http://js.ugd.edu.mk/index.php/YFE/article/view/501>. Date accessed: 25 mar. 2019.
Section
Articles