When I first heard about the Solow model (Solow, 1956) about 25 years ago, I learned that
that this growth model was written as a response to the Harrod–Domar model and as such
was mainly concerned with the existence, stability, and adjustment to a steady state. Steadystate
growth was shown to be the result of exogenous technological change. The empirical
relevance of the Solow model for understanding long-run economic growth or cross-country
differences in the level of development was certainly not an issue, as documented in the
textbooks of the time, e.g. Burmeister and Dobell (1970), Jones (1975), and Hacche (1979).
Today, the Solow model is presented in a very different way. Recent textbooks rarely
mention the Harrod–Domar model, and the Solow model is now mainly used to explain