The Solow model shows how saving and population growth determine an economy's steady-state capital stock and its steady state level of income per person. It shows how in the long run, countries that save a high fraction of their output are richer and why countries with high levels of population growth are poorer. We have also seen how the rate of technological progress determines the rate of growth in living standards.

$\alpha$

0.20
01

$δ$

0.20
00.3

$n$

0.01
00.2

$g$

0.02
00.2

$s$

0.35
01

$k$

1.69
03