Answer to Question #58374 in Macroeconomics for sthiti pragyan tripathy

Question #58374
what is meant by golden role steady state? in what respect it is different from the steady state of solow? is the golden rule steady state a stable condition? expalin with help of diagram?
1
Expert's answer
2016-03-18T15:48:04-0400
The Golden Rule savings rate is the rate of savings which maximizes steady state level or growth of consumption.
In the Solow growth model, a steady state savings rate of 100% implies that all income is going to investment capital for future production, implying a steady state consumption level of zero.

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