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Imagine now that the goal of the planning authority is to maximize consumption in the short run, i.e., to choose the saving rate s that
Imagine now that the goal of the planning authority is to maximize consumption in the short run, i.e., to choose the saving rate s that will provide the highest possible consumption immediately after the implementation of the policy change, irrespective of long-run consequences. What s should the authority choose? What will be the new steady state level of capital and consumption? You do not need to plot anything
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