golden rule capital

2 Golden Rule Capital Again, start with the equation of motion for the Solow Growth model kg+1(l + n) = 371+ 3k? - 5k: and parameter values 6 = 0.06, n = 0.01 (population is shrinking) and o = 0.5. Set the savings rate 3 = 0.1 l. Solve for the golden rule steady state? 2. How much consumption would be gained by consuming at the golden rule steady state compared to the steady state consumption with s = 0.1. 3. Suppose that you begin at the steady state capital per capita associated with s = 0.1 in period 0. Again, number a spread sheet with periods from 0 to 100. In period 1, set the savings rate to the golden rule steady state and then compute kg through period 100. How close do you get to the new steady state? 4. In the first period after 3 changes to the golden rule, 39,. is consumption higher or lower? In period 100