The Solow Model of Economic Growth for Developing Countries

Abstract

The Solow Model, also known as the Solow-Swan Growth Model, is a foundational concept in economics that explains long-term economic growth by looking at capital accumulation, labour or population growth, and technological progress. This paper examines the theoretical shift from the Harrod-Domar to the Solow growth model through the lens of inference to the best explanation, while also highlighting the relevance of Solow’s steady-state capital-labour ratio within an instrumentalist framework. Furthermore, it explores how the model’s structure provided the basis for predicting income convergence in developing countries, as interpreted through Hempel’s covering-law model. CZU: 330.44:330.35; JEL: B22, O47