New Books Network Verena Halsmayer on Managing Growth in Miniature: Solow’s Model as an Artifact
Nov 24, 2025
Verena Halsmayer, a postdoctoral fellow from the University of Vienna, dives into her award-winning book that examines the Solow growth model, a pivotal concept in postwar economics. She discusses the historical journey of this model, its assumptions about technology, and its impact on policy. Verena emphasizes the importance of viewing economic reasoning as a practice rather than just theory. The conversation also touches on how the model influenced both interventionist policies and the complexities of measuring productivity and technology.
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Models As Practices, Not Just Ideas
- Verena Halsmayer treats economists' knowledge as historically specific practices rather than just abstract ideas.
- She studies models and measurement as practical activities with tools, teaching, and institutions shaping reasoning.
Solow's Parsimonious Growth Mechanism
- The Solow model creates a simple, frictionless mathematical world where growth depends on capital, labor, and technological change.
- Its core claim: population and capital cannot raise long-run growth rate; technology (exogenous) must change it.
TFP Is A Broad Residual Label
- In Solow's empirical application the unexplained residual became labeled 'technical change' or TFP.
- That residual bundles measurement error and social, political, and cultural influences beyond model inputs.
