The failure of the Solow model to duplicate the growth data quantitatively leads us to look for differences across countries in productivity. Why do some countries get less output from the same level of inputs as do other countries? The first half of the video builds on the previous three Solow videos and includes some equations but keep going! The data on productivity differences across countries is dramatic and undestanding these differences is important for development.

Corresponding lesson: http://mruniversity.com/solow-model-4-%E2%80%93-productivity