ECONOMIC GROWTH
445
(1
+
n
) (
k
t
+
1
-
k
t
)
0 or
k
t
+
1
k
t
. The capital per worker increases, as
depicted by the arrows pointing rightwards from
k
0
until
k
=
_
k
, at which point,
the investment per worker equals the replacement of worn-out capital per
worker inclusive of the additions to the workforce. Then, the right-hand side
of Eq. (16.17) is zero so that,
(1
+
n
)(
k
t
+
1
-
k
t
)
=
0
or,
k
t
+
1
=
k
t
=
_
k
(16.18)
A point described by Eq. (16.18), where,
k
t
+
1
=
k
t
is called a
STEADY
STATE
.
Suppose that the economy began with a capital stock per worker that ...
Get Macroeconomics, 2nd Edition by Pearson now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
