The Solow Swan model of economic growth

The Solow Swan model of economic growth 1.0 Purpose Examine aspects of the Solow-Swan model of economic growth and identify whether capital accumulation has been the cause for growth in the cases of South Korea and Australia. 2.0 The Solow-Swan Model in brief The model shows how growth in capital stock (KM) and labour (L) affect economic growth (Y). It assumes that there is diminishing marginal returns for labour and capital considered separately as inputs and constant returns to scale when taken together. Mathematically, this is expressed as: Y = AK ÃŽ ± L 1-ÃŽ ± (from Cobb-Douglas Production function, where Y= National Income, K=Capital, L= Labour, A= Total Factor Productivity and 0