For any given saving rate, depreciation rate, and production function, changing the initial capital stock yields a different steady state.

Question

Quizplus · Accepted Answer

The steady state in a growth model is determined by the saving rate, depreciation rate, and the form of the production function, not by the initial capital stock. The initial capital stock affects how long it takes to reach the steady state, but not the steady state itself.

For Any Given Saving Rate, Depreciation Rate, and Production Function