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The Solow Model Unleashed: Understanding Economic Growth

Nicolas Vincent and Pierre Yared


Columbia CaseWorks ID: 130304

Abstract:
The following spreadsheets accompany the "The Solow Model Unleashed: Understanding Economic Growth" case study.
ng Economic Growth

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be used or reproduced
The Solow Model Unleashed: Understanding Economic Growth
Nicolas Vincent and Pierre Yared

The following parameters in the yellow boxes can be changed


US France/US France
Starting Population (Pop0) 150 0.30 45
Starting Capital (K0) 10000 0.03 250
Starting Total Factor Productivity (A0) 10 1.00 10
Population Growth (%DPop) 2% 1.00 2%
Employment to Population Ratio (N/Pop) 0.40 1.25 0.50
Investment Rate (I/Y) 0.30 1.00 0.30
Total Factor Productivity Growth (%DA) 0% 0.00 0%
Depreciation Rate 5% 1.00 5%

Output per Capita - France and US


100.000

10.000

UNITED STATES
FRANCE
1.000
1950 1960 1970 1980 1990 2000 2010
UNITED STATES
FRANCE
1.000
1950 1960 1970 1980 1990 2000 2010
mic Growth
Columbia CaseWorks ID: 130304

nd US

UNITED STATES
FRANCE

2000 2010 2020


UNITED STATES
FRANCE

2000 2010 2020


The Solow Model Unleashed: Understanding Economic Growth
Nicolas Vincent and Pierre Yared

UNITED STATES
Total Factor
Years from Population Capital-Labor
Labor (N) Capital (K) Productivity
Now (t) (Pop) Ratio (K/N)
(A)
1950 150 60 10000 167 10.00
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
mic Growth
Columbia CaseWorks ID: 130304

TATES
Depreciation Production per
Production (Y) Investment (I)
(dK) Capita (Y/Pop)
2784 835 500 18.562
The Solow Model Unleashed: Understanding Economic Growth
Nicolas Vincent and Pierre Yared

FRANCE
Total Factor
Years from Population Capital-Labor
Labor (N) Capital (K) Productivity
Now (t) (Pop) Ratio (K/N)
(A)
1950 45 22.5 250 11 10.00
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
mic Growth
Columbia CaseWorks ID:130304

CE
Depreciation Production per
Production (Y) Investment (I)
(dK) Capita (Y/Pop)
463 139 13 10.297
The Solow Model Unleashed: Understanding Economic Growth
Nicolas Vincent and Pierre Yared

UNITED STATES - Partial answers


Total Factor
Years from Population Capital-Labor
Labor (N) Capital (K) Productivity
Now (t) (Pop) Ratio (K/N)
(A)
1950 150 60 10000 167 10.00
1951 153 61 10335 169 10.00
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970 223 89 17492 196 10.00
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990 331 132 27505 208 10.00
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 492 197 41721 212 10.00
mic Growth
Columbia CaseWorks ID: 130304

Partial answers
Depreciation Production per
Production (Y) Investment (I)
(dK) Capita (Y/Pop)
2784 835 500 18.562
2851 855 517 18.635

4345 1303 875 19.493


6567 1970 1375 19.826

9818 2945 2086 19.949

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