Solow Model in India: Indian Economy Notes for UPSC
Solow Growth Model, developed by economist Robert Solow, provides a framework for understanding economic growth by focusing on the role of capital acc
Solow Model in India: UPSC Notes The Solow Growth Model , developed by economist Robert Solow, provides a framework for understanding economic growth by focusing on the role of capital accumulation, labor, and technological progress. Its application to India helps analyze the country's growth trajectory and identify policy implications. Key Features of the Solow Model: Capital Accumulation : Economic growth depends on the accumulation of physical capital, such as machinery and infrastructure. Labor Growth : Growth is also influenced by the increase in the labor force. Technological Progress : Sustained long-term growth is driven by technological improvements. Diminishing Returns to Capital : Additional investment yields progressively smaller increases in output. Steady State : The economy reaches a point where output, capital, and labor grow at the same rate, maintaining a constant level of capital per worker. Convergence : Economies with lower initial levels of capital per worker grow faster th…