Solow's growth

[krokodilizm]

Does anyone know what is the difference between Solow’s growth model
and potential GDP model which is
growth rate in potential GDP = long-term growth rate of technology + α (long-term growth rate in capital) + (1 – α) (long-term growth rate in labor)
Is it just another name?

 

[Harrogath]

Solow made that model using cobb-douglas equation / function.
The derivation you posted there is one of the conclusions of the model. However, it is not much a “philosofical” conclusion, it is just the math of the equation.

 

[krokodilizm]

So the formula above can be seen as Solow’s model? A question may ask “using Solow’s model…”

 

[bfry]

Salow’s growth model is and extension of the Neoclassical Model.
You are correct that Salow’s model is just the growth accounting equation.

 

[krokodilizm]

Thank you.

 

[Harrogath]

Yup, it is. A widely accepted model for explaining basics of economic growth.