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Suppose the economy is initially at the steady state as depicted in the Solow growth model with technological progress. Explain why a reduction in the
Suppose the economy is initially at the steady state as depicted in the Solow growth model with technological progress. Explain why a reduction in the saving rate might lead to a reduction in the steady state level of consumption. Describe the growth path of consumption per worker as the economy moves from one steady state to the other.
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