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?
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.
So the formula above can be seen as Solow’s model? A question may ask “using Solow’s model…”
Salow’s growth model is and extension of the Neoclassical Model.
You are correct that Salow’s model is just the growth accounting equation.
Thank you.
Yup, it is. A widely accepted model for explaining basics of economic growth.