Interactive simulator

Solow Growth Model Simulator

In the Solow model, the saving rate determines the steady state: saving funds investment, which raises capital per worker until depreciation catches up. This simulator plots the saving/investment curve against depreciation and finds the steady-state capital stock. Raise the saving rate and watch the steady state rise — but growth returns to the rate of technological progress, not the saving rate. In this release this page is powered by the closest available interactive widget; a dedicated widget for this topic is planned.

030609012015001020304050Quantity QPrice PDSE (Q*=64, P*=18.0)
Qd = 100 − 2PQs = 10 + 3PEquilibrium price P* = 18.00Equilibrium quantity Q* = 64.00
Reading the market

Equilibrium solves Qd = Qs, so P* = (a − c) ÷ (b + d). Shifting demand changes a; shifting supply changes c. A ceiling only bites when set below P* (creating a shortage); a floor only bites when set above P* (creating a surplus).

How to use it

  1. Set the saving rate.

  2. Find the steady state where investment equals depreciation.

  3. Raise the saving rate and watch the steady state move.

  4. Observe that long-run growth still depends on technology.

What you will learn

  • Explain how saving determines the steady state.
  • Distinguish level effects from growth effects.
  • State the role of technological progress.

Model notes

Cobb-Douglas technology with illustrative parameters; population growth and technological progress are fixed sliders, not derived. A growth-theory illustration, not a calibration.