Ans. The change in capital stock in the solow model is given by: a. Δ k = σ f ( k ) − δ k.In this video I introduce the Solow growth model and show how to solve for the steady state. The steady state is the key to understanding the solo model. At the steady state investment is equal to depreciation. An increase in saving and investment raises the capital stock and thus raises the full-employment national income and product. Solow model is a mixture of an old-style Keynesian model and a modern dynamic macroeconomic model. Output and capital per worker grow at the same constant, positive rate in BGP of model. In long run model reaches BGP. 2. We will examine how the model works when growth comes through capital accumulation, and how it works when growth is due to innovation.