The Solow model predicts that global differences in steady position output per person occur owing to international differences in technology for a constant capital output ratio. In the Solow model (Solow, 1956), the production technology is constant while income per capita is invariable in the steady state.
However, it is important to note that most of the empirical growth text that refers to the Solow model employs a specification of steady state differences in yield per person. This occurs owing to international differences in the capital output ratio for a constant level of technology.
The Solow model indicates an empirical specification that allows for global technology differences and presumes a steady capital output ratio that provides an excellent description of the cross-country data. There has been technological progress in the United States and globally which is a major contribution to trade and economic growth. For example, the U.S. farm sector productivity nearly tripled from 1950 to 2000. In addition, the number of internet users has increased from 361 million users in 2000 to 2.0 billion users in 2010. Most models of international trade highlight the direct effect of international trade.