<P> In the Solow - Swan model if productivity increases through technological progress , then output / worker increases even when the economy is in the steady state . If productivity increases at a constant rate , output / worker also increases at a related steady - state rate . As a consequence , growth in the model can occur either by increasing the share of GDP invested or through technological progress . But at whatever share of GDP invested , capital / worker eventually converges on the steady state , leaving the growth rate of output / worker determined only by the rate of technological progress . As a consequence , with world technology available to all and progressing at a constant rate , all countries have the same steady state rate of growth . Each country has a different level of GDP / worker determined by the share of GDP it invests , but all countries have the same rate of economic growth . Implicitly in this model rich countries are those that have invested a high share of GDP for a long time . Poor countries can become rich by increasing the share of GDP they invest . One important prediction of the model , mostly borne out by the data , is that of conditional convergence ; the idea that poor countries will grow faster and catch up with rich countries as long as they have similar investment ( and saving ) rates and access to the same technology . </P>
<P> In the Solow - Swan model if productivity increases through technological progress , then output / worker increases even when the economy is in the steady state . If productivity increases at a constant rate , output / worker also increases at a related steady - state rate . As a consequence , growth in the model can occur either by increasing the share of GDP invested or through technological progress . But at whatever share of GDP invested , capital / worker eventually converges on the steady state , leaving the growth rate of output / worker determined only by the rate of technological progress . As a consequence , with world technology available to all and progressing at a constant rate , all countries have the same steady state rate of growth . Each country has a different level of GDP / worker determined by the share of GDP it invests , but all countries have the same rate of economic growth . Implicitly in this model rich countries are those that have invested a high share of GDP for a long time . Poor countries can become rich by increasing the share of GDP they invest . One important prediction of the model , mostly borne out by the data , is that of conditional convergence ; the idea that poor countries will grow faster and catch up with rich countries as long as they have similar investment ( and saving ) rates and access to the same technology . </P>
why is gdp / capita not a sufficient measure of success of a nation
why is gdp / capita not a sufficient measure of success of a nation
all countries have the same steady state rate of growth
all countries have the same steady state rate of growth