In the Solow model with a positive rate of population growth n and technological progress z, the steady state level of real output per effective worker y grows at the rate:

Question

Quizplus · Accepted Answer

In the Solow model with positive rates of population growth (n) and technological progress (z), the steady state level of real output per effective worker (y) does not grow; it remains constant. Growth in output per effective worker is achieved before the steady state is reached. Once the steady state is achieved, increases in population and technology only serve to keep the economy moving along the steady state path without increasing the level of output per effective worker.

In the Solow Model with a Positive Rate of Population