Fun with spreadsheets and figures
All the theory and math can sometimes get in the way of understanding what is going on in the Solow model. The best way to understand it is to work with it visually.
Brute force
The first way to approach this is to just calculate the result period by period. This link will take you to an Excel spreadsheet where I’ve set up the Solow model this way.
You should be able to walk through period by period and see how the equations used in the Study Guide map to the formulas used in the spreadsheet. One advantage of the spreadsheet is that you can also play with the parameters and see how this changes the path of log GDP per capita, the growth rate of GDP per capita, and the relationship of K/Y and $g_{K/Y}$.
It’s best to walk through that spreadsheet in class with assistance from me (or your instructor), but the basic idea is that you can tweak what happens in period 10 and see how that influences the path of GDP per capita, the growth rate, and the K/AL ratio over time.
Brute force, but in code
It’s possible to do this a little less “brute” like, in a coding language like R. By the time you get things set up it isn’t obvious that this is in fact less trouble than the spreadsheet. The advantage of the code is that it allows you to expand on and play with the model in a deeper way.
You can access that code here and it will walk you through how to run and plot outcomes from the model.
Point and click
As an alternative the following app allows you to tweak the parameters of the model and see how various outcomes evolve over time. In essence, this is an interactive version of the spreadsheet that is easier to adjust, but remember it is doing exactly the same thing.
You can use this link to open the app in a separate tab (recommended). Or, use the embedded version below. Just note that the embedded version is squeezed into the frame, so you might have to scroll down in the sidebar to see all the parameters and results.