The Solow growth theory of the 1950s assumed
A) there was exogenous technological advance.
B) there was unlimited technological advance.
C) the steady state did not exist.
D) only wealthy countries would converge to the steady state.
E) wealthy countries would continue to experience sustained economic growth.

Question

Quizplus · Accepted Answer

The Solow growth theory of the 1950s assumed that there was exogenous technological advance, which means that technological progress is not a result of economic growth but rather occurs independently. This assumption was central to the theory's conclusion that countries would converge to a steady state of economic equilibrium, where the rate of output growth would equal the rate of population growth and technological progress.

The Solow Growth Theory of the 1950s Assumed