Rethinking Growth: An Extension of the Solow-Swan Model

TL;DR

This paper extends the classical Solow-Swan economic growth model by incorporating energy production as a new factor using a generalized Cobb-Douglas function, aiming to integrate environmental sustainability into growth analysis.

Contribution

It introduces a novel extension of the Solow-Swan model that includes energy production, providing a new theoretical framework for sustainable economic growth analysis.

Findings

Extended model incorporates energy as a growth factor

Mathematical analysis reveals new solution dynamics

Framework supports sustainable development policies

Abstract

The aggregate Cobb-Douglas production function stands as a central element in the renowned Solow-Swan model in economics, providing a crucial theoretical framework for comprehending the determinants of economic growth. This model not only guides policymakers and economists but also influences their decisions, fostering sustainable and inclusive development. In this study, we utilize a one-input version of a new generalization of the Cobb-Douglas production function proposed recently, thereby extending the Solow-Swan model to incorporate energy production as a factor. We offer a rationale for this extension and conduct a comprehensive analysis employing advanced mathematical tools to explore solutions to this new model. This approach allows us to effectively integrate environmental considerations related to energy production into economic growth strategies, fostering long-term sustainability.