Abstract:

In this paper, the balanced economic growth path was considered in a new growth model with endogenous technical progress. It is not only obtained the optimal allocation about capital and labor between a goods-producing sector and a R&D Sector,but also the optimal value of saving rates. By discussing the effect of parameters, it are also got the following results: When the rate of time preference (discount factor) rising, the
fractions of Capital and labor in the goods-producing sector will increase，the fractions in R&D sector and the saving rates will decrease; When the population grows rapidly, the result will be contrary.

Key words: Utility function, balanced growth path, endogenous technical progress