Question: Looking for any help on how to answer. An incomplete answer is also fine. An economy is in a steady state where the MPK =

Looking for any help on how to answer. An incomplete answer is also fine.

Looking for any help on how to answer. An incomplete answer is

An economy is in a steady state where the MPK = 12%, depreciation is 4% per year, population growth is 2% per year, and the growth rate of efciency workers is 2% per year. Suppose a politician says the government should move the savings rate towards the value that maximizes consumption per worker. If the government cares only about people who are alive now, since they are voters, should the government implement this policy? Use all appropriate models, graphs and mathematics in your explanation

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