Section 11.2 introduces the Solow growth model, a classic in the theory of economic growth. The key assumption of the Solow–Swan growth model is that capital is subject to diminishing returns in a closed economy.An increase in saving and investment raises the capital stock and thus raises the full-employment national income and product. Abstract. This article examines the growth theory of Robert Solow1, which has been a point of reference of economic growth since the 1950s. Output and capital per worker grow at the same constant, positive rate in BGP of model. In long run model reaches BGP. 2.