Romer Endogenous Growth

SD · 38

Y = K^α(A·L_Y)^1−α. Knowledge: dA/dt = δ·A·L_A. Capital: dK/dt = sY − ηK. With L=L_Y+L_A, putting people into research drives sustained growth in both Y and A.

research share L_A/L 0.20

savings s 0.20

research productivity δ 0.030

capital share α 0.33

year0

Y—

K—

A—

g_A (knowledge)—

g_Y (output)—

Output YCapital KKnowledge A