Harrod–Domar model
From Devec
The Harrod–Domar model is a long-run economic growth model.
Contents
Model assumptions
Variables in the model
Name | Variable | Unit | Rival input? | Variable type | Notes |
---|---|---|---|---|---|
Output | Y | Units of GDP (dollar?) | – | Endogenous | |
Physical capital (capital stock) | K | Yes | Endogenous | Physical capital includes things like machines, computers, buildings, etc. | |
Consumption | C | ||||
Investment | I | ||||
Amount saved | S | ||||
Growth of X | ![]() |
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Depreciation (rate?) | δ, d, D | Unitless | |||
Capital per worker | k = K/L | Endogenous | |||
Fraction saved | s | Unitless | |||
Time | t | Time, e.g. years | |||
Production function | F |
Mathematical formalism
Discrete
Continuous
History
Commentary
Easterly in The Elusive Quest for Growth criticizes this model.
See also
External links
- Harrod–Domar model (Wikipedia)