How does the Solow Model help to explain a country's economic growth?
How does the Solow Model help to explain a country's economic growth?
Durabuild Inc., a US-based, family-owned construction company with affiliates in France, wants to recapture the high growth levels that it enjoyed in France in the decades following World War II. The founder's granddaughter reflects on the economic factors that affected growth there and in the United States during that midcentury period and beyond, and she discusses with the current president (her father) whether the company should now consider expanding into China. This case introduces students to the Solow Model and how various economic factors affect productivity. In a related assignment, students are asked to explain why France grew so quickly and why growth slowed down and never fully caught up to that of the United States.
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