Understanding The Growth Theory By Solow Economics Essay

Understanding The Growth Theory By Solow Economics Essay Robert Solow was born of a Jewish family on August 23, 1924 in Brooklyn. Fortunate with the opportunity to attend public schools, he had a strong academic foundation along with with motivation and mentoring he was awarded a scholarship to attend Harvard University in 1940. During his freshman year at Harvard he chose sociology and anthropology as his majors with a minor in elementary economics. At the end of 1945 Robert Solow decided to serve in the US army and later returned to Harvard in 1945. The depression at the time strongly influenced him to study the way the economy actually worked and after returning from the army he decided to switch gears and studied economics. At Harvard he was an assistant to Wassily Leontief producing the first set of capital coefficient for the output and input model sparking his interest in statistics and probability models which lead him to Columbia University for a concentration in statistics. About the same time he was also offered a position to lecture economics and statistics at Massachusetts Institute of Technology (MIT) which he accepted and overtime his fascination leaned more with macro economics. For 40 years Solow worked closely with Paul Samuelson and together they developed numerous work together such as: Balanced Growth under Constant Returns to Scale, (1953), Theory of Capital (1956) and A Complete Capital Model Involving Heterogeneous Capital Goods. In 1961, Robert Solow won the John Bates Clark Award which is given to someone under 40 years who have made a major contribution to economic thought and knowledge. His continued efforts and passion for macro economics resulted to him winning the Nobel Prize in 1987 for his analysis in economic growth. Over the years Solow has continued to be a prominent figure as an economist, his theory is thought all over the world from government to his theory thought in schools. The study of the factors which permit production growth and increased welfare has been a central feature in economic research for many years. Robert M. Solows prize recognizes his exceptional contributions in this area. This paper will discuss the major contributions Robert Solow made to economics in an A Contribution to the Theory of Economic Growth (1956), the influences for his analysis and its relevance in understanding how the economy works. Understanding the Solow growth theory is a challenge due to the number of models that he incorporates to explain growth theory. The basic model focuses on the accumulation of capital after which Solow incorporates new factors such as population growth and technology in order to show the changed result in comparison to the basic model. To aid in development of his Growth Theory, Robert Solow addressed the specifics concerning the growth of an advance industrial economy, this was first developed by Nicholas Kaldor. Kaldor has six characteristics for the economy, four of which Solow focused mainly to development the Solow model. Real output grows at a constant rate. Capital Stock grows at a constant rate Real growth and capital stock are likely to be the same Profit rates show a horizontal trend with the exception of changes in effective demand. The first three characteristics describe when an economy is in the steady state. To expand on this definition the steady state as described by Robert Solow is constant growth and capital stock. In an article, A Contribution to the theory of economic growth (1956) Solow growth model represented an addition to the Harod- Domar Model which explained growth patterns in terms of savings and capital. The main differentiation between his model and the Harrod-Domar model lay in Solows assumption that wages could adjust to keep labor fully employed. The Solow Model is neo-classical and as a results focuses primarily on the supply side. This implies that as long the supply of a good increases then economic growth can be accomplished. In this aspect it differs from the Keynesian models which focus on the demand side of the economy in areas such as: unemployment and inflation. The supply side In Solows model follows the following assumptions: One good in production with no change in technology and two factors of production, capital (K) and labor (L) deriving the following equation Y =F (K, L). The demand side for the Solow model assumes that output demand is equal to consumption and therefore there is no disposable income in the economy. Y= C + S Thus far the model describes a stagnant economy and Solow introduces dynamic factors in the model to show capital accumulation which are investment which increases the capital stock and depreciation which decreases capital stock. The saving rate in this model represents the tradeoff between consumption and investment. This means, what is not consumed is saved in the economy; this therefore increases capital stock growth or capital accumulation in the economy. In the active economy in the Solow model the production changes and is represented by the equation Y=F (K, S, à ¢Ã‹â€ Ã¢â‚¬Å¡, k0) meaning output is a function of capital, savings, depreciation and capital stock. By utilizing the capital stock increases output in different periods but at some point the economy comes to a steady state as described by the Solow Model. The steady state is accomplished when output and capital are in equilibrium. It also implies that the economy will cease to grow so there is no change in capital at that point. Furthermore an economy in a positive steady state does not move from that point therefore this can also be considered as the equilibrium point The variables listed above can be divided into two variables exogenous which comprises of savings depreciation and capital stock and endogenous which are capital, income and investments. The model shows that increased savings shifts increases investments which impacts the steady rate causing it to shift also. This activity illustrates that higher savings in an economy means that there is higher capital stock thus leading to higher steady state per worker. Therefore in the economy one need to know that is the optimum level of savings is necessary to get to maximize steady state which is known was the golden rule. To recap, the steady state can be referred to as long run equilibrium in the economy and savings is critical in the model because it shows that by increasing savings the steady state can shift upward which asserts higher level of capital stock per worker. The concept of golden rule was also incorporated in the Solows Growth Theory but prior to that the golden rule was a concept by Jon von Neumann and later in the work of Edmund Phelps. In Solows Growth Theory, he makes the assumption that policy makers will consequently determine a savings rate that will maximize consumption per worker referring to it as the golden level of capital accumulation. Robert Solow did not stop here with his theory he went on further to introduce population growth in his dynamic model which also means that the labor force is growing as well. What Solow is illustrating is the effect of this exogenous factor on the population. Therefore the capital stock will be divided thinly across the increasing population. Since this increase in population is decreasing the capital stock this indicates there is a negative effect on income per worker. Solow then adds technology to the model, technology as described by Solow can improve efficiency of production and this means that there is an increase in output ultimately leading to the sustained growth in the economy. At this stage in the model, Solow uses a new production function to describe the economy Y=F (K, L, E, à ¢Ã¢â‚¬Å¡Ã‚ ¬) this means that output is a function of capital, labor, efficiency and effective worker for this economy. Solow goes on to describe what is meant by an efficient worker and this is characterized by knowledge, familiarity and ability. Output can consequently increase by the efficiency levels of workers. Efficiency in this model per effective worker can move the steady state equilibrium where capital stock per worker constant. As a result, with technological progress in this model the capital stock per worker is growing at the technology rate even in the steady state due to efficiency in the economy. We can see that even if capital is not growing in the steady state capital per effective worker is at the rate of technology. In addition, this also asserts that output per worker is also growing at a rate of technology. Combined, total output and capital stock are both growing when the two variables population and technology are present. The Solow Model therefore shows that technological progress in the economy explains sustained economic growth in the context of living standards per worker.

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ley Mack Ms. Barr English 9 Honors December 11, 2013 The Morality of It All â€Å"A system of morality which is based on relative emotional values is a mere illusion, a thoroughly vulgar conception which has nothing sound in it and nothing true†; this Socratic idea demonstrates a very distinct concept of morality. It shows that morality is not to be based on emotion, but on logic. If a person chooses to use their emotions to fuel a system of morality, things could go downhill quickly. Just like Socrates had to choose between emotions and logic, in Homer’s epic poem, The Odyssey, the protagonist Odysseus struggles between emotions and logic as he tries to get his crew back safely after the Trojan War has ended. As he embarks on his journey home, he is faced with many obstacles and options that question his ethical beliefs. As time goes by and more and more of his crew eventually die off, he successfully moves on past his setbacks and finds himself back in his kingdom of Ithaca, only to discover it crawling with suitors attempting to woo his wife , Penelope. Odysseus is mostly construed as a tragic war hero with many flaws. He finds himself in many life-threatening situations as a direct result of his actions, he is characterized by having too much pride, and he is unfaithful to his wife. However, Odysseus is very much so still a hero because he perseveres and has an internal drive that gets him home no matter what, despite the fact his hubris is one of his biggest hindrances, his pride gets his men out of many dangerous situations, and even though he is physically adulterous to his wife, he emotionally longs for her then entire time he tries to reach home. Particularly, Odysseus is challenged with many treacherous obstacles, yet he finds... ...pon himself. As well. He reveals that he blinds the son of a god, and he falls to temptation. Throughout this experience, though, Odysseus tries to better himself, as you can see when he moves past Circe and Calypso to try to get home to his wife. He may still make a mistake now and then, but he is better than he was before. Odysseus is very much like people today. He tries his hardest to be the best he can, but sometimes fails to reach his goal and makes and error. Just like modern-day people, Odysseus is flawed. He had his hindrances, just like them. Newer generations most likely learn to make mistakes because they grow up watching their elders make mistakes. It is human nature to do something wrong now and again. Just because someone has flaws does not make them a bad person and Odysseus demonstrates how a good person could have imperfections through their values

The Spy Who Came in from the Cold

John le Carre: The Spy Who Came in from the Cold This book is a spy story, about bluffs between the British Secret Service and the German Democratic Republic. I found it very difficult to understand. The stroy occurs during the Cold War, in the 1950s and 1960s. The main character is Alec Leamas, a british agent in charge of East German espionage. He is recalled to the Circus, because there are no agents left. Control asks him to ’stay in the cold’. That means one last mission for him, his job is providing false information to the East German Communists.During his job in the libary he fells in love with his co-worker, a Jewish woman, Liz Gold. She is at the Communist Party in Britain. Leamas goes to jail because he assaults a civilian. He goes to Netherlands, then to East Germany, to the Intelligence Srvice. At the same time, George Smiley and Peter Gulliam travel to Liz Gold’s house, and have many questions about Alec. Leamas meets Fiedler, an East German spy, Mu ndt’s lieutenant, who joined the Communists and remained an anti-Semite. Mundt ordains the torturing and arresting of Fiedler and Leamas.Than it is a little complicated, becase Fiedler reports Mundt at the same day. I also find it hard to understand the situation from different eyes. We can get to know many characters thoughts. Sometimes I cannot decide which is the good side and the bad. It is very exciting and complicated, sometimes confusing. Fiedler discovers that Mundt is a double agent, and he was arrested before, but allowed to escape if he agreeing to work. Liz Gold’s apartment is paid by George Smiley and she promises Leamas to not to look for him after his leaving.Mundt gets to know these thing, and that those things happened before the murdering. Liz is sent to the jail with Leamas, and they are taken in a car together. Many things become clear. Liz gets to know that the British Intelligence intended to kill Fiedler. The end of the story is outrageous. Perso nally I waited for a happy end after many complicated and confounded situations. Liz and Leamas wanted to break the wire on the Berlin Wall, to escape to West Berlin. Leamas climbs up to the Wall and when he touches Liz’s hands, she is shot.Smiley tells him to jump down from the West side, but he climbs back. He is shot dead as well. I think he realised that he was a fool, he was manipulated and he had that chance to flee, but it did not work, so he gave up. I have never read such a story before, I have a sense that I have to read it once more, because there are many things I did not clearly understand. It is so lifelike and realistic that I can imagine it has happened in reality during the Cold War.

Score College Credit Guide for the AP Physics 1 Exam

The AP Physics 1 exam (non-calculus) covers Newtonian mechanics (including rotational movement); work, energy and power; mechanical waves and sound; and simple circuits. For many colleges, the Physics 1 exam does not cover the same depth of material as a college physics course, so youll find that many of the more selective schools will not accept a high Physics I exam score for college credit. If at all possible, students serious about the sciences and engineering should try to take the calculus-based AP Physics C exam. About the AP Physics 1 Course and Exam Physics I is an introductory-level physics course grounded in algebra, not calculus. Students in the course explore a range of topics in Newtonian physics organized into 10 content areas: Kinematics. Students study forces and how interactions between systems can change those systems.  Ã‚  Dynamics. Students examine how the properties of a system determine how the system will behave.  Circular Motion and Gravitation. Students learn about gravitational forces and use Newtons third law to predict the behavior of systems.Energy. Students study the relationship between forces on a system and kinetic energy, and they learn how to calculate the total energy of a system. They also study the transfer of energy.Momentum. Students learn about the ways in which a force on a system can change the momentum of an object. This content area also covers the conservation of momentum.Simple Harmonic Motion. Students examine the conservation of energy, and the behavior of oscillating systems.Torque and Rotational Motion. Students learn how a force on an object can create torque and change the objects angular momentum.  Electric Charge and Electric Force. This content area examines h ow a charge on an object can affect its interaction with other objects. Students study long-range and contact forces.DC Circuits. In studying direct current circuits, students examine how the energy and electric charge of a system is conserved.Mechanical Waves and Sound. Students learn that a wave is a traveling disturbance that transfers energy and momentum, and they study concepts such as amplitude, frequency, wavelength, speed, and energy.   AP Physics 1 Score Information AP Physics 1 exam is the most popular of the four AP Physics exams (it has three times more test-takers than the AP Physics C Mechanics exam). In 2018, 170,653 students took the AP Physics 1 exam, and they earned a mean score of 2.36. Note that this is by far the lowest mean score of all AP exams—in general, students who take the AP Physics 1 exam are less prepared than those who take any other AP subject. Since most colleges who do allow credit for the exam require a score of a 4 or 5, only  about 21% of all test takers are likely to earn college credit. Be sure to consider this low success rate before deciding to take AP Physics 1 in high school.  Ã‚   The distribution of scores for the AP Physics 1  exam is as follows: AP Physics 1 Score Percentiles (2018 Data) Score Number of Students Percentage of Students 5 9,727 5.7 4 26,049 15.3 3 33,478 19.6 2 48,804 28.6 1 52,595 30.8 The College Board has released preliminary score percentages for the 2019 AP Physics 1 exam. Realize that these numbers may change slightly as late exams get added to the calculations. Preliminary 2019 AP Physics 1 Score Data Score Percentage of Students 5 6.2 4 17.8 3 20.6 2 29.3 1 26.1 Course Credit and Placement for AP Physics I The table  below presents some representative data from a variety of colleges and universities. This information is meant to provide a general overview of the scoring and placement practices related to the AP Physics 1 exam. For other schools, youll need to search the college website or contact the appropriate Registrars office to get AP placement information. Sample AP Physics 1  Scores and Placement College Score Needed Placement Credit Georgia Tech 4 or 5 3 hours of credit for PHYS2XXX; the Physics C (calculus-based) exam is required to earn credit for PHYS2211 and PHYS2212 Grinnell College 4 or 5 4 semester credits of science; will not count towards the major and does not satisfy any prerequisites LSU 3, 4 or 5 Students need to take the Physics C exams to earn course credit MIT - no credit or placement for the AP Physics 1 exam Michigan State University 4 or 5 PYS 231 (3 credits Mississippi State University 3, 4 or 5 PH 1113 (3 credits) Notre Dame 5 Physics 10091 (equivalent to PHYS10111) Reed College - no credit or placement for the Physics 1 or 2 exams Stanford University 4 or 5 Students must score a 4 or 5 on BOTH the Physics 1 and Physics 2 exams to earn course credit Truman State University 3, 4 or 5 PHYS 185 College Physics I UCLA (School of Letters and Science) 3, 4 or 5 8 credits and PHYSICS General Yale University - no credit or placement for the Physics 1 exam A Final Word About AP Physics 1 Its helpful to keep in mind that college placement isnt the only reason to take the Physics 1 exam. Selective colleges and universities typically rank an applicants academic record  as the most important factor in the admissions process. Extracurricular activities and essays matter, but good grades in challenging college preparatory classes matter more. The reality is that success  in challenging courses is the best predictor preparedness available to the admissions officers. Doing well in a course such as AP Physics 1 serves this purpose well, as do other AP, IB, and Honors classes.   To learn more specific information about the AP Physics 1  exam, be sure to visit the  official College Board website.