Peoples & Things Verena Halsmayer on Managing Growth in Miniature: Solow’s Model as an Artifact
Nov 24, 2025
Verena Halsmayer, a historian of economics and science at the University of Vienna, discusses her award-winning book on the Solow growth model. She explores how this pivotal model shaped postwar economics, emphasizing the role of technological change. Verena highlights the model's simplicity and its impact on policy-making, revealing its ambiguous interpretations across various political contexts. Both she and the host examine the importance of focusing on practices rather than just ideas in understanding economic modeling.
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Treat Economics As Practical Culture
- Study economics as a historically specific practice rather than only a set of ideas to reveal how tools shape outcomes.
- Focus on modeling and measurement practices to understand how economic knowledge influences policy.
Technology As The Residual Driver
- The Solow model frames long-run growth as driven by technological progress outside the model rather than capital or labor alone.
- Economists treated the unexplained difference between output and input growth as a 'residual' labeled technological change.
A Frictionless Mathematical World
- The Solow model presents a frictionless mathematical world with full employment, perfect competition, and perfect foresight.
- That abstraction makes it powerful for reasoning but hides political, environmental, and institutional realities.
