Theory-Based Models
Theory-Based Models
Theory-Based Models
A long-run growth framework linking saving, depreciation, population growth, and productivity to the steady-state capital stock and output path.
Theory-Based Models
A growth framework for tracking how capital accumulation converges, and how Golden Rule, AK, MRW, and Malthusian variants change the story.
Core question
How do saving and break-even forces shape long-run capital and output?
Start with this visual summary, then move to explore for parameter control and compare for side-by-side scenarios.
Variables
The central Solow state variable.
Produced from capital and productivity.
Share of output devoted to accumulation.
Visual readout
Steady-state capital
91.2
Output
24.3
Consumption
17.0
Golden Rule capital
147.4
Keep this panel as the fast first pass. Use explore for calibration workflow and compare for alternate scenarios.
Assumptions
The baseline Solow branch has diminishing returns to capital.
AK is the special branch that removes that property.
Population growth, technology growth, and depreciation form the break-even drain.
Steady state sits where saving and break-even needs match.
Parameters
Fraction of output saved and invested.
Curvature of the production function.
Technology level in production.
Growth in labor input.
Growth in labor-augmenting technology.
Capital wear and replacement needs.
Starting capital stock for the transition path.
MRW branch saving share for human capital.
MRW production contribution of human capital.
Fixed land available in the Malthusian branch.
Importance of fixed land in the Malthusian branch.
Target income per person in the Malthusian branch.
Sensitivity of demographic change to income gaps.
Starting human-capital stock for MRW paths.
Shock presets
Raises the saving schedule and pushes the steady state outward.
Raises output and the saving schedule.
Raises the break-even requirement.
Presets