Introduction In the Solow model of Chapter 4, the production technology is held constant income per capita is constant in the steady state. Neither point is true in the real world: 1929-2001:U.S.real GDP per person grew by a factor of 4.8,or 2.2%per year. examples of technological progress abound (see next slide) CHAPTER 5 Economic Growth ll slide 3CHAPTER 5 Economic Growth II slide 3 Introduction In the Solow model of Chapter 4, ▪ the production technology is held constant ▪ income per capita is constant in the steady state. Neither point is true in the real world: ▪ 1929-2001: U.S. real GDP per person grew by a factor of 4.8, or 2.2% per year. ▪ examples of technological progress abound (see next slide) 1