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2010 - Board of Studies
2010 - Board of Studies

The Neoclassical Growth Models
The Neoclassical Growth Models

... savings curve as savings is proportional to output. The distance between the two curves is the consumption per efficiency unit of labor. The 45 degree line gives the savings needed to maintain any level of capital in efficiency unit. ...
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Steady-state economy

A steady-state economy is an economy of relatively stable size. A zero growth economy features stable population and stable consumption that remain at or below carrying capacity. The term typically refers to a national economy, but it can also be applied to the economic system of a city, a region, or the entire planet. Note that Robert Solow and Trevor Swan applied the term steady state a bit differently in their economic growth model. Their steady state occurs when investment equals depreciation, and the economy reaches equilibrium, which may occur during a period of growth.
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