1
$\begingroup$

I have successfully derived the Golden Rule steady state for capital, but I'm struggling to derive the saving rate = equal to alpha (α) for the Golden Rule level. Have I made an error in my calculations? It's worth noting that I'm assuming no technological growth in my Solow model.

derive $s_{gold}=α$

Consumption is maximised when: $mpk=δ+n$

Production function $f(k)=y=k^α$

$mpk=∂f(k)/∂k=αk^{(α-1)}$

$k_g=(α/(δ+n)^{(1/1-α)})$

$\endgroup$
1
  • $\begingroup$ Have considered typing "golden rule Solow" into the SE's search bar? $\endgroup$
    – Giskard
    Dec 3, 2023 at 22:26

0

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Browse other questions tagged or ask your own question.