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Solow Model 5 Change in Savings Rate
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This video uses the Basic Solow Model to determine the long-run effects of an increase in the rate of savings. The video uses the concept of the Golden Rule savings rate to determine the time path for consumption and explains the role of knowing where the maximum consumption steady state is. The time paths for all the key variables of the model are traced our: capital per worker (k), output per worker (y), investment per worker (i), and consumption per worker (c).
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