66 936
Assignments Done
99,1%
Successfully Done
In October 2018

Answer to Question #65095 in Macroeconomics for Puspa Tripathy

Question #65095
What is meant by steady state in the Solow model? Derive conditions for steady state in
an economy. What is the significance of decreasing returns in the Solow model?
Expert's answer
The Solow model is a neoclassical model of an economical growth of Robert Solow. It bases on the Cobb-Douglas production function. In this case a factor of the economical growth is a technical progress. Returns decrease on a sum of investments and consumption. So, we have such an equivalence as:
Y (returns) = I + C
Full employment and new technologies are the main conditions of steady state in an economy.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions