Munich Personal RePEc Archive

Solow (1956) as a Model of Cross-Country Growth Dynamics

McQuinn, Kieran and Whelan, Karl (2007): Solow (1956) as a Model of Cross-Country Growth Dynamics. Published in: Oxford Review of Economic Policy , Vol. 23, No. 1 (March 2007): pp. 45-62.

[img]
Preview
PDF
MPRA_paper_5892.pdf

Download (203kB) | Preview

Abstract

Despite the widespread popularity of the Solow growth model, much of the recent empirical work based on the classic framework misrepresents a crucial feature of the model. Namely, the growth rate of technological progress, assumed to be exogenous in the Solow model, is often identified as being constant across countries. This simplification of the behavior of technological progess runs counter to the evidence and has had a number of significant implications for the interpretation of the Solow model. One implication has been an overemphasis on the role of factor accumulation in explaining cross-country income differentials. In addition, the commonly-cited empirical result that the speed of conditional convergence is slower than predicted by the Solow model is a function of this inaccurate assumption about technology rather than due to a failure of the model itself.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.