SoLOW SHAN MoDEL (1956)

Neo elasical gTocoth.Hhaory

s possib le..oT.aneconomyo.no
posiime groth..aesoreneby
Simply Sarimg and mYestmen &
Capikal stoek

DasieAssumpicma
A Composie.nitohouaahod eroducon
h o . OumaHhe nputs and
a lso managex thotechnologu. Hha
ramstorms mous. into.Output

Y) FLKC). L)T()J 0
duhahde
outpul.physieal labou...Heehnologieal
bita. - -
knooledje - -

KC) maehine building..ete

Cp70daueod.9Ometime m .
wsing
1Ct) mo 0orkes..0T king time
ahillhealth ete

K)L) 092 uival imputsl

 ia imbus = thee.onnot be. wed
by 1 mul tiple 0s.Imultaneously

TCE) le o...knocoledge...c. L

fechnoloqy anho...Same a¢rosS..

the ecoM.0. Dm Nom iray...nputs,

u0o TOduce,s.. Can..TodeseoYunil

oCutpu.each..ing. diont.se!. - - - -

maehinasdeamd.. woTkwsis....bul
imq... Sam. teehmoleay

=One Seekor. Produchon. echnotogy.

(tor.. elbsed..e.emomy).
Output...Can h0 CombumedCLtand..
BCred S(E)
Saximg9 mestma n1IC).

Creatian.. neco.physieakCapita..
Orfo eplace..do. depeiatedeapit.
- - - -

KCe) of) =I )
Ye)= t 14)noring ovt)
 C):SaringTate nps

Rctionad HIHChoose Tate (AC))

Sarings.
Cmparing. he Cost and 0encfit0
oday Oen tOmorr0.

Jhis....Covm þaTi SOm... esbOcferane

paramefes..Cie Ciseo LantimA ate.
Ianteestsake ete.).
).n this. nodel,..
IteRsE....rate.ia
- -
mot...nelwded
BC.) xogeneously AmeN...

St) =IE).=nolealkage.

Deota oiaion.ate apital 8 20

Cabital homogenoou=kooTe evapoTaMq
al Anits f earal os0 assuhod to b

egudly. prodoecimg

Nein Creao in o stock o physica

tal af
cabi a point tim
T

kCe) -T) -Sk)

C -AT[K) L(U)»T(:)] SK(t)..9)
-
 (). detesmime 1la dynamies..o.Ktor... qie
echnology cnd ldhou

homogneo labouforeg pepulafim..

populatian gTTate. L/LL: mz0.

eyogeNOO LW
L(t) e" =

gimes.thisgr.Date.
10
1o
isolake.Hhe. imfooct.ealbital. aucumulation
.TC) is.Cmidosd do. baixed.
Ch araeieigties..otha.n00-elaai ea
pToduciam2 -

)onm oruonx..to...sealo..
PCAKCE) ALCE)ATCt))
EAECKt),LG) TC))oT all A o - - - - - - - -

Scale...definad.in..fesm».atoo
. i al.impus.CK and 42.

T cmstant = Same leel

level q-
+eehnolog arailohle 1o all
-------
 )Positive anddiminishimgetusAto
ainal.inbuts
FKO F/K2 40 FL}o ,F/%o .

3)4nada Comdikim..(96%).
CFK) (OF%L)-
- -

L-

assentiali y
Annpu esRrial.a Strictly.
posiie0meun meodod 6prddaco
aposiine.amount. cOu pu --
F (O.L) :
FCKO)0
en eapika..voiables
Ase P follauo CRS ----

FAL, ,T) : AF (, k.t)-- - - - -

Suppose.
 YLECK,LT)= E("/.T)..
=FCKL T) =LF C/L,T). * * *

fCh)=ben eapita oupu

intenaire...preduetim

MPL Ca)- hCh)

.HPK. Ch2

KCEDALfCk)S.Kt).
C)
L
d"Eomid R 7L

Chamge In pen eapita. eairal sfock a

 dt L2
- - --

- -

/-hn A/L=).

()-6+m)k
Fundamantal dieentijal euatim.6
Sofoc Scmam.Ha dol.
ateapaeha hion.
ts) eRortine dolbse eiavi on ate

for Cabi taj.-laboue.odi. a2

SarImg. rate.CL). . 2 0 0 hen.
hysea Capital....pes penson...0ocad.
deee poetl
ly..deaoto. depsaeiat.i.am.
eapifa S)..omd...pa9tly...dea.
to nerecuso. D.oolatiom.Ch)....

raieal... escmtatiom.
h

(nts)

nt8)
 Derimiionof steudy stare
= balancod. qtocath path.

Tegate Yasucwolos.Aroc..at the

&aa.adeamd þek eap1ta.
yOdu TLMaum... nehan gRd.
dk dL n
K

K ZL

.l l g K.log
KLO
iagrom..t. indieates. stea.dy. stare
eqwti u . . . cohaA

stCa)-nt8).=o
Correspond img Sheady stute.
valua peeafita.edoital a)

p apia outpu ():Ca)

Conaumptio A):i- ( k )
 A tead srade. an.itaea.ai.tal Cht2
=..natamt....
C-8)f Ch)
Hen co 1m..--- - meo elamieal moda..
pita --

quanlities Chy)
doe not..gro ca.1 3Fead..state...

Onca amdo....a Chamge i n e

lene...fteehmalogy ead o.he
shittm.. n). dre. Swftin...
pOdaebicm ) . ehamge.im .
hamge...im. .nand. hange in.
debateiostiom.aHue +ho Deh
eapika.erel
n tea.du. stafe H Oco eMOI. Oma
time. ohnge. imoligs. swf no...
.he. . ate
Ake HeHeo hs mode9.dils
.o Tovide exblamatima.1he
detenminants.... ho n.un
pe Cabita
E Inereaso in s.

n+b)

IneTe a.

mba.cmems.ntat eehnology
golden.Rule. of.Cabital...Aeeunulati.om..
and Dynamie nofieiene.
teehnologym thne.
C iqu stetdy-staute..aluo h ) .
(cshiehigreates than. 903a)
Caeh ..vu.oSarimg..Tate.).
i.e...=h)U

as.s s.=Xdh/a.s>0 - - - -

Bteady staBe leel of pen Cupika

Cmaembtim. CC*)

8)}[G]

)1o)h
d A ' ( ) .dh*-(nts)db
d
=f'Cn*).CntJdk
 dh/ 20.
80 dAMi0.pro Ydeo
'Cn) Cnt)

Aod

sgold

Imereasos n . .couth..TIse Im...s.j.

Otolevl s Omd decoane ith.
o gh.eel o stead state
be pita. Cansumptim )attaims
Its 3aximu) ohen 7ds0
i.a ) Cnts).

Stim.gTatehat...maximise
Steudy-State pe Cabita Comumptiom
Callad Hh qoldon uale.
Sacximg.ate...(bgdvha).
- (n+)hgold
Cgold hgol
MAoeiated. pe capita eapita u
knn a
Capital goden.i
Voct qold
olden..mulo. pen eapia
umulati on
qold)