• Author / Uploaded
• Gagandeep Arora

Citation preview

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.

g Economic Growth

Understanding Economic Growth" case study.

Copyright Information © 2013 by The Trustees of Columbia University in the City of New York. All rights Neither this spreadsheet nor the associated case can be used or reproduced without explicit permission from Columbia CaseWorks. To obtain permission, please visit: www.gsb.columbia.edu/CaseWorks or e-mail: [email protected]

ty of New York. All rights reserved. e 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 Starting Population (Pop0) Starting Capital (K0) Starting Total Factor Productivity (A0) Population Growth (%Pop) Employment to Population Ratio (N/Pop) Investment Rate (I/Y) Total Factor Productivity Growth (%A) Depreciation Rate

US 150 10000 10 2% 0.40 0.30 0% 5%

France/US 0.30 0.03 1.00 1.00 1.25 1.00 1.00 1.00

France 45 250 10 2% 0.50 0.30 0% 5%

Output per Capita - France and US

1000000000000.000

10000000000.000

100000000.000

1000000.000

10000.000

100.000 UNITED STATES FRANCE 1.000 1950

1960

1970

1980

1990

2000

2010

100.000 UNITED STATES FRANCE 1.000 1950

1960

1970

1980

1990

2000

2010

ic Growth Columbia CaseWorks ID: 130304

and 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 Years from Now (t)

Population (Pop)

Labor (N)

Capital (K)

Capital-Labor Total Factor Ratio (K/N) Productivity (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

153 156 159 162 166 169 172 176 179 183 187 190 194 198 202 206 210 214 219 223

61 62 64 65 66 68 69 70 72 73 75 76 78 79 81 82 84 86 87 89

10335 10674 11016 11361 11711 12064 12421 12782 13148 13517 13892 14271 14655 15044 15438 15837 16242 16653 17070 17492

169 171 173 175 177 179 180 182 183 185 186 188 189 190 191 192 193 194 195 196

10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

227 232 237 241 246 251 256 261 266 272

91 93 95 97 98 100 102 104 107 109

17921 18356 18798 19247 19702 20165 20635 21112 21597 22090

197 198 199 199 200 201 201 202 203 203

10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

mic Growth Columbia CaseWorks ID: 130304

TATES Production (Y)

Investment (I)

Depreciation (dK)

Production per Capita (Y/Pop)

2784

835

500

18.562

2851 2919 2988 3058 3129 3201 3274 3348 3424 3501 3579 3658 3739 3821 3905 3990 4076 4164 4254 4345

855 876 896 917 939 960 982 1005 1027 1050 1074 1097 1122 1146 1171 1197 1223 1249 1276 1303

517 534 551 568 586 603 621 639 657 676 695 714 733 752 772 792 812 833 853 875

18.635 18.705 18.771 18.833 18.893 18.949 19.002 19.053 19.101 19.146 19.189 19.230 19.269 19.306 19.342 19.375 19.407 19.437 19.465 19.493

4437 4532 4628 4726 4826 4927 5031 5136 5243 5353

1331 1360 1388 1418 1448 1478 1509 1541 1573 1606

896 918 940 962 985 1008 1032 1056 1080 1105

19.518 19.543 19.566 19.588 19.610 19.630 19.649 19.667 19.684 19.700

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

FRANCE Years from Now (t)

Population (Pop)

Labor (N)

Capital (K)

Capital-Labor Total Factor Ratio (K/N) Productivity (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

46 47 48 49 50 51 52 53 54 55 56 57 58 59 61 62 63 64 66 67

34 51 76 114 171 256 384 577 865 1297 1946 2919 4379 6568 9853 14779 22168 33253 49879 74818

377 566 852 1279 1921 2885 4330 6498 9751 14631 21950 32931 49401 74108 111169 166762 250151 375237 562866 844310

11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11

10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

68 70 71 72 74 75 77 78 80 82

112227 168341 252512 378768 568151 852227 1278340 1917511 2876266 4314399

1266479 1899733 2849616 4274443 6411685 9617551 14426352 21639556 32459366 48689084

11 11 11 11 11 11 11 11 11 11

10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

mic Growth Columbia CaseWorks ID:130304

CE Production (Y)

Investment (I)

Depreciation (dK)

Production per Capita (Y/Pop)

463

139

13

10.297

696 1045 1568 2353 3531 5298 7949 11926 17890 26838 40259 60391 90590 135888 203836 305759 458643 687969 1031960 1547947

209 313 470 706 1059 1590 2385 3578 5367 8051 12078 18117 27177 40766 61151 91728 137593 206391 309588 464384

19 28 43 64 96 144 217 325 488 732 1098 1647 2470 3705 5558 8338 12508 18762 28143 42216

15.160 22.315 32.837 48.314 71.076 104.551 153.783 226.185 332.662 489.250 719.529 1,058.179 1,556.199 2,288.586 3,365.630 4,949.525 7,278.789 10,704.184 15,741.537 23,149.418

2321927 3482899 5224358 7836548 11754833 17632262 26448407 39672626 59508956 89263453

696578 1044870 1567307 2350964 3526450 5289678 7934522 11901788 17852687 26779036

63324 94987 142481 213722 320584 480878 721318 1081978 1622968 2434454

34,043.369 50,063.895 73,623.504 108,270.000 159,220.742 234,148.318 344,335.945 506,376.591 744,671.677 1,095,105.647

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

UNITED STATES - Partial answers Years from Now (t)

Population (Pop)

Labor (N)

Capital (K)

Capital-Labor Total Factor Ratio (K/N) Productivity (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 1981 1982 1983 1984 1985 1986 1987 1988

153

61

10335

169

10.00

223

89

17492

196

10.00

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

331

132

27505

208

10.00

492

197

41721

212

10.00

mic Growth Columbia CaseWorks ID: 130304

Partial answers Production (Y)

Investment (I)

Depreciation (dK)

Production per 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