Chapter 3 Traditional Growth Theories and the OSG Model

Fundamental progress in economics has to do with the restudy of basic ideas. It is through the reexamination as well as reinterpretation of basic ideas that we can fully appreciate the past and become aware of possibility of and hindrance to advancing. The Solow model is the starting point for almost all analyses of economic growth. It was the first neoclassical version of the Harrod-Domar growth model. It opened a new way to modeling economic growth. The previous chapter asserted that the only difference between the Solow model and the OSG model, so far, is description of consumer behavior. This chapter explains differences between the Solow model and the OSG model. We also examine differences ...

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