A modification of this model can be plotted on a phase space diagram, on which a saddle path goes through two of the quadrants formed by the c-dot and k-dot equals zero loci.
A modification of this model can be plotted on a phase space diagram, on which a saddle path goes through two of the quadrants formed by the c-dot and k-dot equals zero loci. Because agents discount future consumption in that variant, the saddle path does not intersect the capital-maximizing "golden rule" proposed by this model. This model predicts capital maintains a constant share of output, matching one of Kaldor's "stylized facts." Romer added human capital to the micro-inspired Cobb-Douglass production function at the center of this model. This model added labor to the earlier Harrod-Dommar model. It assumes investment in new capital is a constant fraction of output. For 10 points, identify this neoclassical growth model developed independently by its namesake and Trevor Swan.
A modification of this model can be plotted on a phase space diagram, on which a saddle path goes through two of the quadrants formed by the c-dot and k-dot equals zero loci.
Solow-Swan growth model [or neoclassical growth model before mention]