ABSTRACT
In 1956, Robert Solow published a seminal paper on economic growth and development titled ‘A Contribution to the Theory of Economic Growth’, which is explored in this chapter. The Solow model of economic growth, also known as the Solow-Swan model, ignores some important aspects of macroeconomics, such as short-run fluctuations in employment and savings rates, and makes several assumptions that may seem to be heroic in order to describe the long-run evolution of the economy. The resulting model remains highly influential even today and despite its relative simplicity conveys a number of very useful insights about the dynamics of the growth process. In particular, it provides an important cornerstone for understanding why some countries flourish while others are impoverished.
