If the actual capital-labour ratio is above the steady-state capital-labour ratio,growth from convergence will be ________,and the economy will grow ________ than it will along a balanced growth path.

Question

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If the actual capital-labour ratio is above the steady-state capital-labour ratio, it means that the economy has more capital than what is required to maintain a balanced growth path. As a result, growth from convergence will be negative, which means that the economy will experience a decrease in growth rate to move towards the steady-state. Additionally, since the economy already has more capital than required, it will grow slower than it would along a balanced growth path.

If the Actual Capital-Labour Ratio Is Above the Steady-State Capital-Labour