Technological progress — role?
Enables sustained long-term growth
Economic growth — definition?
Sustained increase in per capita GDP.
Exponential growth — effect?
Causes persistent income disparities
Solow model — role?
Explains short-term convergence, long-term tech growth.
Growth rate — formula?
(Y_{t+1} - Y_t) / Y_t
Key growth determinants?
Capital (K), effective labor (H), technology (A).
Diminishing returns — effect?
Limits growth from capital and labor alone.
Technological progress — driver?
Primary driver of sustained long-term growth.
Steady state — meaning?
Where investment equals depreciation; growth halts without tech.
Catch-up growth — what?
Faster growth in poorer economies via technology.
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1. In the context of the Solow model, what happens when an economy reaches its steady state?
2. What is the primary driver of sustained long-term economic growth according to the revision sheet?
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