Forms of technological progress Assume that the rate of exogenous technological progress is constant.
a. Show that a steady state can coexist with technological progress only if this progress takes a labor-augmenting form. What is the intuition for this result?
Assume that the production function is Y = F[B(T )· K, A(t)· L], where B(t) = ezt and A(T ) = ext , with z ≥ 0 and x ≥ 0. Show that if z > 0 and a steady state exists, the production function must take the Cobb-Douglas form.