This model builds on the contributions of many economists, many of whom
have been awarded the Nobel Prize. The importance of the contributions of
Simon Kuznets and Richard Stone in developing the national income and
product accounts cannot be overstated. These accounts reveal a set of growth
facts, which led to Solow’s (1956) classical growth model, which Solow (1970)
calibrated to the growth facts. This simple but elegant model accounts well
for the secular behavior of the principal economic aggregates. With this model,
however, labor supply is supplied inelastically and savings is behaviorally
determined. There are people in the classical growth model economy, but
they make no decisions. This is why I, motivated by Frisch’s Nobel address delivered
here in 1969, refer to this model as the classical growth model.