New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here


by: Dr. Janiya Bernier


Dr. Janiya Bernier

GPA 3.77


Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Class Notes
25 ?




Popular in Course

Popular in Economcs

This 2 page Class Notes was uploaded by Dr. Janiya Bernier on Thursday October 22, 2015. The Class Notes belongs to ECON 161 at University of California - Berkeley taught by Staff in Fall. Since its upload, it has received 30 views. For similar materials see /class/226719/econ-161-university-of-california-berkeley in Economcs at University of California - Berkeley.




Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/22/15
Excel File GoldenRulexls The Golden Rule Level of Capital A 39 quot Review We are trying to explain economic growth The Solow Model says economies go to a steadystate that depends on A at s and 5 according to the following equilibrium condition Aksfk6k0 That means when the additions to capital per worker sfk equal the depreciation in capital per worker 5k the economy is neither growing nor contracting The same k is generating the same y output per worker and c consumption per worker and i investment per worker s the savings rate or fraction of output not consumed is extremely important in this model The idea is that 5 is the same xed constant across countries1 but s can and does vary from economy to economy Thus a given s will result in the economy reaching a particular level of steadystate k y c and i Comgara trve Statics Analgrs ofs GoldenRulexls offers Two Ways to do Comparative Statics 1 Compare one sheet to the another 1 Comp Statics button 2 Compare both on the same sheet 2 Comp Statics button Wit1 numerical sr39mula tron Akmust be close to zero 13911 order to compare equ rbrrum positions Via Algebra we have a third way to do comparative statics The reducedform is 1 k 3 mil k SA Since y Aka that means the reducedform for y is D will zA y 39LKSA J39 mi y Aim In turn this gives us c and i 5 71 C l A l S ksA You take the derivative of any of these expressions with respect to s and then evaluate the result 1 To ponder 5 may change over time Think about computers versus say shovels Do computers wear out faster Do they wear out faster and faster over time Think about it 3lfR9rpGLvdoc Page 1 of2 7716 Golden Rule Now we know that k y c and i depend upon s and the other exogenous variables Increase s and the steadystate values of the endogenous variables change Now suppose an gmniscient gmnipotent ocial planner OOSP had the power to SETS In other words OOSP or Leviathan depending on your political persuasion could choose s and that would determine the steadystate k y c and i values What value of s should be choosen This is an optimization problem We have to set up and solve this optimization problem 1 Setting Up the Problem What are the three elements of an optimization problem 1 Goal max c 2 Endogenous Variable s 3 Exogenous Variables A at and 5 11 Finding the optimal solution 7716 Transition to the SteadySta te Figure 410 With Mankiw s Example s03 for 100 years then s04 for 100 years 5 4 3 y c 2 i 1 O O 50 109 150 200 250 ear i 5K AK 0 50 100 150 200 250 Year GoldenRulexls 3lfR9rpGLvdoc Page 2 of2


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.