In the model where the state of technology does not change what determines the steady state output per worker?

1 answer

In the model where the state of technology does not change, the steady state output per worker is determined by the level of capital per worker. This is because in this model, output depends on the productivity of labor and the stock of capital. As capital accumulates, the productivity of labor increases, leading to higher output per worker. However, as the stock of capital approaches a certain level, the marginal productivity of additional capital decreases, eventually leading to a steady state level of output per worker.