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Solow (1956) as a Model of Cross-Country Growth Dynamics

Author

Listed:
  • McQuinn, Kieran

    (Central Bank and Financial Services Authority of Ireland)

  • Whelan, Karl

    (Central Bank and Financial Services Authority of Ireland)

Abstract

Despite the widespread popularity of the Solow growth model, much of the recent empirical work based on the classic framework misrepresents a crucial feature of the model. Namely, the growth rate of technological progress, assumed to be exogenous in the Solow model, is often identified as being constant across countries. This simplification of the behaviour of technological progress runs counter to the evidence and has had a number of significant implications for the interpretation of the Solow model. One implication has been an overemphasis on the role of factor accumulation in explaining cross-country income differentials. In addition, the commonly-cited empirical result that the speed of conditional convergence is slower than predicted by the Solow model is a function of this inaccurate assumption about technology rather than due to a failure of the model itself.

Suggested Citation

  • McQuinn, Kieran & Whelan, Karl, 2007. "Solow (1956) as a Model of Cross-Country Growth Dynamics," Research Technical Papers 1/RT/07, Central Bank of Ireland.
    • Handle: RePEc:cbi:wpaper:1/rt/07
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    Cited by:

    1. Elliott, Robert J.R. & Sun, Puyang & Xu, Qiqin, 2015. "Energy distribution and economic growth: An empirical test for China," Energy Economics, Elsevier, vol. 48(C), pages 24-31.
    2. Mureithi Everlyne Kabura, 2022. "Impact Of Foreign Aid On Economic Growth In Kenya 2006-2020," Journal of International Relations, IPRJB, vol. 2(1), pages 1-14.
    3. Kuikeu, Oscar, 2011. "Arguments contre la zone franc [Against the cfa franc zone]," MPRA Paper 33710, University Library of Munich, Germany.
    4. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "Energy distribution and economic growth," Resource and Energy Economics, Elsevier, vol. 33(4), pages 782-797.
    5. Zhian Yang & Pingzhang Lv & Shiqiang Sun, 2025. "The Impact of New Infrastructure Investment on the International Tourism Industry: Evidence from Provincial-Level Panel Data in China," Sustainability, MDPI, vol. 17(6), pages 1-19, March.
    6. Ding, Sai & Knight, John, 2009. "Can the augmented Solow model explain China's remarkable economic growth? A cross-country panel data analysis," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 432-452, September.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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