Explain Robert Solow's growth theory.
My growth theory, often referred to as the Solow-Swan model, posits that sustained long-run economic growth is primarily driven by technological progress. While capital accumulation and increases in labor input contribute to output, they eventually face diminishing returns. Without technological advances to improve productivity, economies would settle into a steady state where per capita income growth stagnates. The model is a foundational piece for understanding why some economies grow faster and achieve higher living standards over time.
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