So A increases over time This implies that the number of effective workers AN

So a increases over time this implies that the number

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So A increases over time! This implies that the number of effective workers ( AN ) increases over time. 24
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| Date 09-01-2017 faculty of economics and business Technology and the steady state (3) In the long run, capital per effective worker reaches a constant level, and so does output per effective worker. This implies that output ( Y ) is growing at the same rate as effective labour ( AN ). 25
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| Date 09-01-2017 faculty of economics and business Technology and sustainable growth In the steady state, output ( Y ) grows at the same rate as effective labour ( AN ); effective labour grows at a rate ( g A + g N ); Therefore, output growth in steady state equals ( g A + g N ). The growth rate of output is independent of the saving rate. Because output, capital and effective labor all grow at the same rate, ( g A + g N ), the steady state of the economy is also called a state of balanced growth. 26
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