BAUMOL:UNBALANCED GROWTH 419 and (5) L:=L-L:=L/(1+Ke" 女22 zero.Thus of the outputs of the two sectors is held constant, more and more of the total labor force must be transferred to the non- progressive sector and the amount of labor in the other sector will tend to approach zero. Finally,we may note what happens to the output in the economy if the o mitted to change.Wen utput aouytake as an index of output a weighted aver- e two sectors: I=BiY1+BaYa BaL+BabLaert so that by (4)and (5) I=L(KBa+B2b)e"t/(1+Ke")Re"!/(1+Ke") where R=L(KB1a+B26). Therefore dI/dt =R[re"t(1+Ke")-Kreart]/(1+Ke) rRe"t/(1+Ke)2. As a result,the percentage rate of growth of output will be (dI/dt)/I=r/(1+Ke) which declines asymptotically.We have,then, arrived at Proposition 4:An dedinimg at achieve balanced growth in a relativ to ductiv the rate of growth of the labor force.In particular,if pro- ity in o sector and the total labor force remain constant the growth rate of the economy will asymptotically approach zero. 3.Discussion of the Propositions The logic of the entire analysis can be restated rather simply in intui tive terms.If productivity pe man hot es cumulativelyi In one sector relative to its rate of gro wth elsewher the ec commensurately in all a ,the omy,while wages rise elative cost s in the nonprogressive sectors must inevitably ,and these costs rise cmatieynd ithout limit For while in the progressive sector productivity increases will serve as an offset to rising wages,this offsetmust be maller in the Copyright2001 All Rights Reserved