The Ramsey-Cass-Koopmans growth model modifies the Solow model by endogenizing this variable.
The Ramsey-Cass-Koopmans growth model modifies the Solow model by endogenizing this variable. Edmund Phelps found that the "golden rule" value of this variable, which maximizes steady-state consumption, is equal to the share of capital in national income. This value makes up the supply in the market for loanable funds, and it causes the paradox of thrift. A fundamental accounting identity states that this value is equal to investment, which is high in countries like China. The "rate" of this phenomenon is what people might set aside as a "nest egg." For 10 points, identify this value that is the difference between one's income and expenses.
The Ramsey-Cass-Koopmans growth model modifies the Solow model by endogenizing this variable.
savings [accept savings rate; accept capital accumulation]