The Effects Of Population Growth On The Steady State Of The Solow Growth Model

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The effects of population growth on the steady-state of the Solow growth model INTRODUCTION As the creation of neo-classical economic growth model pioneer, Solow growth model creates a new breakthrough in terms of the theoretical model in the reality and plays an important role in study in long-run economic growth model. The main purpose of this paper is to discuss the effects of population growth on the steady-state and growth rates of the Solow growth model. The structure of this essay is as follows: Section I introduces the Solow growth model and the growth rates of the endogenous variables (capital, output, consumption and savings) in the model. Section II discuss how population growth changes affects the steady state in the Solow growth model. Section III address the limitations raised by Paul Romer and discuss the suggested improvements. Section IV concludes this essay. THE MODEL The Solow growth model try to explain the effect mechanisms of population, technology, investment in economic growth under the optimal allocation of resources. Solow model emphasizes the scarcity of resources, the limits to growth of pure physical capital accumulation. This production function and the savings rate remains unchanged, the population growth rate unchanged, the assumption of constant technological progress combine to form a complete dynamic general equilibrium model(Stein,2007). Solow model begins with the production function just simply a mathematical model describing how

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