The Solow growth model predicts that a country's standard of living can continue to increase in the long run only if

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The Solow growth model emphasizes the importance of total factor productivity, which refers to the efficiency with which inputs (capital and labor) are used to produce output. Sustained increases in total factor productivity are necessary to maintain long-term economic growth and increases in standard of living, as they lead to higher output without requiring increased inputs. While sustained increases in capital stock, population, and labor force can contribute to economic growth in the short run, they eventually lead to diminishing returns and cannot sustain long-term growth on their own. Sustained increases in government spending would increase demand and potentially stimulate short-run economic growth, but cannot sustain long-term growth without increases in productivity.

The Solow Growth Model Predicts That a Country's Standard of Living