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  • P-ISSN 1738-656X
  • E-ISSN 2586-4130

한국개발연구. Vol. 36, No. 1, March 2014, pp. 107-126

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Testing Solow’s Implications on the Effective Development Policy

Hyeok Jeong

Author & Article History

Manuscript received 13 November 2013; revision received 13 November 2013; accepted 19 February 2014.


The core of the neoclassical growth theory is the capital investment. Solow proposed that the diminishing return is key to such growth process in establishing the stability of the equilibrium growth path. This key postulation has critical implications on the sustainable and effective development policies, emphasizing the importance of productivity growth not only for the steady-state growth but also for the transitional growth from capital accumulation. This paper suggests a novel way to test the diminishing return, the backbone assumption of Solow model, and confirms its strong presence using the Penn World Tables version 8.0 data, hence validates Solow's implications on effective development policies.


Capital Accumulation(자본축적), Diminishing Return(수확체감의 법칙), TFP(총요소생산성), Development Policy(개발정책), Development Effectiveness(개발효과성)

JEL Code

O11, O15, O47

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