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Robert M. Solow

Bio: Robert M. Solow is an academic researcher from Massachusetts Institute of Technology. The author has contributed to research in topics: Unemployment & Medicine. The author has an hindex of 77, co-authored 264 publications receiving 57825 citations. Previous affiliations of Robert M. Solow include Princeton University & New York University.
Topics: Unemployment, Medicine, Productivity, Inflation, Wage


Papers
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Book ChapterDOI
TL;DR: Forrester as discussed by the authors proposed a team of experts to make a psychosocial analysis of the world equilibrium, which would take about ten years and would include people who had been successful in their personal careers, whether in politics, business or anywhere else.
Abstract: I was having a hard time figuring out how to begin when I came across an excerpt from an interview with my MIT colleague Professor Jay Forrester, who is either the Christopher Columbus or the Dr. Strangelove of this business, depending on how you look at it. Forrester said he would like to see about a hundred people, the most gifted and best qualified in the world, brought together in a team to make a psychosocial analysis of the problem of world equilibrium. He thought it would take about ten years. When he was asked to define the composition of his problem-solving group, Forrester said: “Above all it shouldn’t be mostly made up of professors. One would include people who had been successful in their personal careers, whether in politics, business, or anywhere else. We should also need radical philosophers, but we should take care to keep out representatives of the social sciences. Such people always want to go to the bottom of a particular problem. What we want to look at are the problems caused by interactions.”

102 citations

Journal ArticleDOI
01 Jan 1970
TL;DR: The best-known economic fact in the United States is that the rate of inflation has been significantly higher during the past two years than at any time since the Korean war as mentioned in this paper.
Abstract: THE BEST-KNOWN ECONOMIC FACT in the United States, among economists, investment advisers, housewives, and everyone else, is that the rate of inflation has been significantly higher during the past two years than at any time since the Korean war. It has increased despite the best efforts of Washington policy makers to restrain it through, first, the tax surcharge of July 1968; second, a reduction in the growth of the money supply virtually to zero beginning in June 1969; and third, a strenuous effort by the administration to reduce federal expenditures even to the point of the veto of a large education bill.'

100 citations

01 May 2001
TL;DR: Brock and Durlauf as discussed by the authors have argued that cross-country regressions define a meaningful surface along which countries can move back and forth at will, and that the causal arrows should rest on some sort of behavioral mechanism.
Abstract: I am broadly in sympathy with the spirit of the article by William Brock and Steven Durlauf and that by William Easterly and Ross Levine They are trying to move the literature in the right direction I say this even though I have been skeptical from the beginning about the interpretation of cross-country growth regressions The potential problem of reverse causality has been obvious to everyone It has usually been met with the standard econometric dodge: using lagged values of slow-moving variables as instruments But this cannot be a serious solution to the problem The causality issue points to a deeper question: Do cross-country regressions define a meaningful surface along which countries can move back and forth at will? If this is the idea, what mechanism could underlie such a surface? Brock and Durlauf call such a regression a “model” I suppose in a statistical sense it is But an economic model should have some internal structure; its causal arrows should rest on some sort of behavioral mechanism, and that seems to be missing in this literature I think I had this prejudice even before cross-country regressions became fashionable I thought of growth theory as the search for a dynamic model that could explain the evolution of one economy over time There were no explicit crosssectional implications Were there implicit ones? Certainly, and my comments bear on the question of what they might be

99 citations

Posted Content
TL;DR: In this paper, the authors present an exposition of the one-sector neoclassical growth model, which is a simplified description of the real side of a growing capitalist economy that happens to be free of fluctuations in aggregate demand.
Abstract: This chapter is an exposition, rather than a survey, of the one-sector neoclassical growth model. It describes how the model is constructed as a simplified description of the real side of a growing capitalist economy that happens to be free of fluctuations in aggregate demand. Once that is done, the emphasis is on the versatility of the model, in the sense that it can easily be adapted, without much complication, to allow for the analysis of important issues that are excluded from the basic model.Among the issues treated are: increasing returns to scale (but not to capital alone), human capital, renewable and non-renewable natural resources, endogenous population growth and technological progress. In each case, the purpose is to show how the model can be minimally extended to allow incorporation of something new, without making the analysis excessively complex.Toward the end, there is a brief exposition of the standard overlapping-generations model, to show how it admits qualitative behavior generally absent from the original model.The chapter concludes with brief mention of some continuing research questions within the framework of the simple model.

96 citations


Cited by
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Journal ArticleDOI
TL;DR: In this article, the authors consider the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development, and compare three models and compared to evidence.

16,965 citations

Journal ArticleDOI
TL;DR: The authors examined whether the Solow growth model is consistent with the international variation in the standard of living, and they showed that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data.
Abstract: This paper examines whether the Solow growth model is consistent with the international variation in the standard of living. It shows that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data. The paper also examines the implications of the Solow model for convergence in standards of living, that is, for whether poor countries tend to grow faster than rich countries. The evidence indicates that, holding population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts. This paper takes Robert Solow seriously. In his classic 1956 article Solow proposed that we begin the study of economic growth by assuming a standard neoclassical production function with decreasing returns to capital. Taking the rates of saving and population growth as exogenous, he showed that these two vari- ables determine the steady-state level of income per capita. Be- cause saving and population growth rates vary across countries, different countries reach different steady states. Solow's model gives simple testable predictions about how these variables influ- ence the steady-state level of income. The higher the rate of saving, the richer the country. The higher the rate of population growth, the poorer the country. This paper argues that the predictions of the Solow model are, to a first approximation, consistent with the evidence. Examining recently available data for a large set of countries, we find that saving and population growth affect income in the directions that Solow predicted. Moreover, more than half of the cross-country variation in income per capita can be explained by these two variables alone. Yet all is not right for the Solow model. Although the model correctly predicts the directions of the effects of saving and

14,402 citations

ReportDOI
TL;DR: In this paper, the authors show that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

12,469 citations

Journal ArticleDOI
TL;DR: In this article, the authors argue that the style in which their builders construct claims for a connection between these models and reality is inappropriate, to the point at which claims for identification in these models cannot be taken seriously.
Abstract: Existing strategies for econometric analysis related to macroeconomics are subject to a number of serious objections, some recently formulated, some old. These objections are summarized in this paper, and it is argued that taken together they make it unlikely that macroeconomic models are in fact over identified, as the existing statistical theory usually assumes. The implications of this conclusion are explored, and an example of econometric work in a non-standard style, taking account of the objections to the standard style, is presented. THE STUDY OF THE BUSINESS cycle, fluctuations in aggregate measures of economic activity and prices over periods from one to ten years or so, constitutes or motivates a large part of what we call macroeconomics. Most economists would agree that there are many macroeconomic variables whose cyclical fluctuations are of interest, and would agree further that fluctuations in these series are interrelated. It would seem to follow almost tautologically that statistical models involving large numbers of macroeconomic variables ought to be the arena within which macroeconomic theories confront reality and thereby each other. Instead, though large-scale statistical macroeconomic models exist and are by some criteria successful, a deep vein of skepticism about the value of these models runs through that part of the economics profession not actively engaged in constructing or using them. It is still rare for empirical research in macroeconomics to be planned and executed within the framework of one of the large models. In this lecture I intend to discuss some aspects of this situation, attempting both to offer some explanations and to suggest some means for improvement. I will argue that the style in which their builders construct claims for a connection between these models and reality-the style in which "identification" is achieved for these models-is inappropriate, to the point at which claims for identification in these models cannot be taken seriously. This is a venerable assertion; and there are some good old reasons for believing it;2 but there are also some reasons which have been more recently put forth. After developing the conclusion that the identification claimed for existing large-scale models is incredible, I will discuss what ought to be done in consequence. The line of argument is: large-scale models do perform useful forecasting and policy-analysis functions despite their incredible identification; the restrictions imposed in the usual style of identification are neither essential to constructing a model which can perform these functions nor innocuous; an alternative style of identification is available and practical. Finally we will look at some empirical work based on an alternative style of macroeconometrics. A six-variable dynamic system is estimated without using 1 Research for this paper was supported by NSF Grant Soc-76-02482. Lars Hansen executed the computations. The paper has benefited from comments by many people, especially Thomas J. Sargent

11,195 citations

Posted Content
TL;DR: In this paper, the authors show that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported, and instead, the equilibriumis one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

11,095 citations