If we define the saving rate as $\bar { s }$ , output as $F \left( K _ { t } , \bar { L } \right)$ , and the depreciation rate as $\bar d$ , and if $$\bar { s } { F } \left( K _ { t } , \bar { L } \right) \bar { d } K _ { t }$$ , the economy is in the steady state.

Question

If we define the saving rate as $\bar { s }$  , output as $F \left( K _ { t } , \bar { L } \right)$  , and the depreciation rate as $\bar d$  , and if $$\bar { s }  { F } \left( K _ { t } , \bar { L } \right) > \bar { d } K _ { t }$$  , the economy is in the steady state.

Quizplus · Accepted Answer

In a steady state, investment equals depreciation, so if $\bar { s }  { F } \left( K _ { t } , \bar { L } \right) > \bar { d } K _ { t }$, the economy is not in a steady state as capital is accumulating.

If We Define the Saving Rate As sˉ\bar { s }sˉ

If We Define the Saving Rate As $\bar { s }$