“if we write down a Simple Model of Growth – Economic Growth that involves investing money in new machines. That there are limits to growth. That the model is going to max out at this point, when the number of machines lost to depreciation is exactly offset by the number of machines that we invested in the previous period. If we start with no machines, growth is going to happen really really fast initially, but then it’s going to fall off when it reaches this equilibrium level. So to get sustained growth, that’s going to require new technologies – new innovations. And that’s where we are going next. We’re going to construct Solow’s Growth Model which includes this Innovation Parameter. ” – Transcript from Scott Page Coursera
Source:
Scott Page Model Thinking MOOC Course
