›So Aincreases over time!›This implies that the number of effective workers (AN) increases over time. 24
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|Date 09-01-2017faculty of economicsand businessTechnology 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
|Date 09-01-2017faculty of economicsand businessTechnology and sustainable growth›In the steady state, output (Y) grows at the same rate as effective labour (AN); effective labour grows at a rate (gA+gN); ›Therefore, output growth in steady state equals (gA+gN).›The growth rate of output is independent of the saving rate.›Because output, capital and effective labor all grow at the same rate, (gA+gN), the steady state of the economy is also called a state of balanced growth.26