GROWTHCORE◉ LIVE LAB

Exponential & Solow Growth

Compounding plus capital, labor and ideas explain why some economies stall.

r = 5%g = 2%
compounding wedges apart · recreated schematic

How it works

  • Output compounds from capital, labor, and ideas.
  • Capital alone hits diminishing returns — savings cannot grow forever.
  • Ideas (non-rival) are the engine that escapes the drag.
Use → Growth diagnostics; ideas are the non-rival engine.
Watch out → Crediting capital deepening for what ideas actually did.
Try it → Decompose any growth story into more inputs vs better recipes.
REDCAPE jobs → Explain · Predict
Free sources → Coursera M4 (Economic Growth)
INTERACTIVE LABoriginal recreation — poke it
■ capital (r)■ income (g)
Growth of 1 unit over 40 years
CAPITAL ×
7.0
WEDGE (r/g)
3.19×

Small rate gaps become large wedges — compounding does the concentrating, no villain required.