From 33718f831a54e30254c194116baba82e9d8c6bad Mon Sep 17 00:00:00 2001
From: bnewbold <bnewbold@robocracy.org>
Date: Mon, 16 Jan 2017 17:24:08 -0800
Subject: examples: solo-swan economic growth model

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 examples/solow_swan_economic_growth/model.modelica | 19 +++++++
 examples/solow_swan_economic_growth/page.md        | 64 ++++++++++++++++++++++
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diff --git a/examples/solow_swan_economic_growth/model.modelica b/examples/solow_swan_economic_growth/model.modelica
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+model SolowSwan
+    "Simple economic growth model"
+    Real Y "total production";
+    Real K "capital factor";
+    Real L "labor factor";
+    Real A "labor-augmentation factor";
+    parameter Real L_0=1 "initial labor";
+    parameter Real A_0=1 "initial labor augmentation";
+    parameter Real alpha "elasticity of output with respect to capital (0 to 1)";
+    parameter Real n "labor (population) growth rate";
+    parameter Real g "augmentation growth rate";
+    parameter Real delta "rate of capital deprecation";
+    parameter Real c "consumption vs. investment fraction (0 to 1)";
+equation
+    Y = K^alpha * (A * L)^(1-alpha);
+    L = L_0 * e^(n*t);
+    A = A_0 * e^(g*t);
+    der(K) = (1-c)*Y - delta*K;
+end SolowSwan;
diff --git a/examples/solow_swan_economic_growth/page.md b/examples/solow_swan_economic_growth/page.md
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+
+The Solow–Swan model is an exogenous growth model, an economic model of
+long-run economic growth set within the framework of neoclassical economics. It
+attempts to explain long-run economic growth by looking at capital
+accumulation, labor or population growth, and increases in productivity,
+commonly referred to as technological progress. At its core it is a
+neoclassical aggregate production function, usually of a Cobb–Douglas type,
+which enables the model "to make contact with microeconomics". The model was
+developed independently by Robert Solow and Trevor Swan in 1956, and superseded
+the post-Keynesian Harrod–Domar model. Due to its particularly attractive
+mathematical characteristics, Solow–Swan proved to be a convenient starting
+point for various extensions. For instance, in 1965, David Cass and Tjalling
+Koopmans integrated Frank Ramsey's analysis of consumer optimization, thereby
+endogenizing the savings rate—see the Ramsey–Cass–Koopmans model.
+
+## Conditional convergence
+
+The Solow–Swan model augmented with human capital predicts that the income
+levels of poor countries will tend to catch up with or converge towards the
+income levels of rich countries if the poor countries have similar savings
+rates for both physical capital and human capital as a share of output, a
+process known as conditional convergence. However, savings rates vary widely
+across countries. In particular, since considerable financing constraints exist
+for investment in schooling, savings rates for human capital are likely to vary
+as a function of cultural and ideological characteristics in each country.
+
+Since the 1950s, output/worker in rich and poor countries generally has not
+converged, but those poor countries that have greatly raised their savings
+rates have experienced the income convergence predicted by the Solow–Swan
+model. As an example, output/worker in Japan, a country which was once
+relatively poor, has converged to the level of the rich countries. Japan
+experienced high growth rates after it raised its savings rates in the 1950s
+and 1960s, and it has experienced slowing growth of output/worker since its
+savings rates stabilized around 1970, as predicted by the model.
+
+The per-capita income levels of the southern states of the United States have
+tended to converge to the levels in the Northern states. The observed
+convergence in these states is also consistent with the conditional convergence
+concept. Whether absolute convergence between countries or regions occurs
+depends on whether they have similar characteristics, such as:
+
+* Education policy
+* Institutional arrangements
+* Free markets internally, and trade policy with other countries.
+
+Additional evidence for conditional convergence comes from multivariate,
+cross-country regressions.
+
+If productivity growth were associated only with high technology then the
+introduction of information technology should have led to a noticeable
+productivity acceleration over the past twenty years; but it has not: see:
+Solow computer paradox. Instead world productivity appears to have increased
+relatively steadily since the 19th century.
+
+Econometric analysis on Singapore and the other "East Asian Tigers" has
+produced the surprising result that although output per worker has been rising,
+almost none of their rapid growth had been due to rising per-capita
+productivity (they have a low "Solow residual").
+
+## References
+
+The page body text came from Wikipedia.
+
+* Wikipedia: [Solow–Swan model](https://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model)
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