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Suppose up until time t, the economy is in a steady state with labor augmenting productivity growing at rate z, and labor growing at rate
Suppose up until time t, the economy is in a steady state with labor augmenting productivity growing at rate z, and labor growing at rate n. At time t, there is a permanent decrease in labor growth, from n to 0. That is, in every period s > t, Ns = Nt. In a figure such as Figure 6.1, show the dynamics of capital per efficiency units of labor, k
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