In this Chapter we shall investigate the properties o f the BGP and o f the transitional dynamics generated by the ULM in the case o f a centralized economy.

Given the preliminary work done in Chapters 1 and 2, the determination of the BGP-stationary values and growth rates o f all the relevant variables is a fairly straightforward task. We are simply required to:

a) substitute the appropriate value o f the contribution o f human capital into the general expression for working time obtained in Chapter 1;

b) determine, according to Definition 1.5, in which regions o f the parameter space the BGP is non-degenerate;

c) substitute the correct value of the contribution o f human capital into the general expression for the growth rate o f the economy obtained in Chapter 1;

d) exploit Lemma 1.1 to obtain the positive growth rates of the primitive variables of the economy;

e) substitute the efficient growth rate o f the economy into the general expressions for the Great Ratios in Chapter 2;

f ) substitute the efficient growth rate o f the economy into the general expressions for the adjoint variables, again in Chapter 2.