INTERACTIVE · GROWTH MODEL
Solow-AI
Cobb-Douglas production extended with AI capital as a third factor: Y = A · Kα · Lβ · AIγ. Move the sliders to reweight the factor shares. The chart re-solves the steady-state output trajectory in real time.
How to read it
The chart shows the output trajectory from the current capital stock to the new steady state. Raising γ (AI's share of output) is meaningful only if AI capex actually grows: that is what the second slider does. Holding γ high while AI capex is zero is a policy aspiration, not a growth story.
The baseline reference is South Africa today: α 0.30, β 0.55, γ 0.15, AI capex 8% of GFCF. The +5yr preset is what an aggressive but credible AI investment programme looks like under the same production technology. The frontier preset is calibrated to a small high-income economy (Singapore, Israel-shaped).
Caveats
- Constant returns to scale assumed: α + β + γ ≈ 1.
- The model is illustrative. Use it to shape an argument, not to size a budget.