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Question 2: (3 marks) Suppose that we have a standard Solow-Swan model studied in class. For simplicity, assuming population growth is 0 . At the
Question 2: (3 marks) Suppose that we have a standard Solow-Swan model studied in class. For simplicity, assuming population growth is 0 . At the steady state, we have: sA(k)=dk According to the Golden rule, the optimal savings rate is the rate that maximizes steady state consumption per worker. Use calculus to derive an expression for s (i.e., express s as a function of the parameters of the model). Hint: solving for the steady-state consumption per capita first. Question 2: (3 marks) Suppose that we have a standard Solow-Swan model studied in class. For simplicity, assuming population growth is 0 . At the steady state, we have: sA(k)=dk According to the Golden rule, the optimal savings rate is the rate that maximizes steady state consumption per worker. Use calculus to derive an expression for s (i.e., express s as a function of the parameters of the model). Hint: solving for the steady-state consumption per capita first
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