| Abstract: | Summary In models of economic growth the long-run rate of growth is usually determined by exogenous factors like the increase in working population and technical progress. In this article the rate of technical progress is treated as an endogenous variable depending on the increase in real wages and the degree of capacity utilization. A clay-clay production model is presented. Moreover, consumption, investment, changes in wages and in prices are explained by additional equations. Numerical steady state solutions for different values of the parameters are discussed. In each case the specific role played by demand and supply is stressed.The authors are Professor of Economics and Assistant Professor of Economics, University of Tilburg, The Netherlands. They are indebted to Professor S. K. Kuipers for valuable comments on an earlier version of the article. |
