This essay aims at establishing whether the Solow Growth Model holds empirically.Firstly, clarity over terminology will be established: a mathematical definition of the steady state, an authoritative description of the Solow Growth Model and its basic derivation. Secondly, the concept of a steady state will be applied to the Solow Model and a short interpretation will follow. Thirdly, a statistical comparative analysis of various countries’ convergence to the steady state will follow. Furthermore, an interpretation and possible explanations will be offered in regard to the empirical investigation.
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Essays by Konrad Urban is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Based on a work at http://www.konradurban.co.uk.