Someone Please Help..ASAP?

Question

For an economy in which there is no technological progress, explain whatmust occur for the steady state to occur. Also explain what this implies about the rate of growth of output, output per worker, and the capital stock.

Answer 1

Steady state implies nothing changes: no change in climate, no change in population or its distribution (either by place or by age), no change in available resources (no variation in soil fertility, in the availability of animals to be hunted), no change in external markets (just about every society trades), etc.

In short, in true steady state, none of the features you mentioned can change either.

If, however, you are allowing other things to change and only keeping technological level constant (which is also a bit unrealistic), then you can't say anything about what else will happen.

Good farming practices will enrich the soil and gradually improve productivity per worker. If these involve creating and improving capital features such as irrigation ditches and terraced rice paddies, it will also improve capital stock.

But it can also result in a nomadic society which does slash and burn agriculture with no changes in output or capital stock for hundreds or thousands of years.

It can also lead to the sort of major population hit induced by climate change and disease (think of the plagues hitting Europe) that make growth negative, reduce individual productivity and capital stock.