A Change in the Savings Rate (s) - Solow Model Application Part 2 of 4

We investigate the effect of a change in the savings rate on the Solow model (that's the variable 's' in our model). We start off with the Solow Diagram and discuss the transition dynamics to expect. And then turn to time-series graphs to see how the model evolves through time.

We analyze the effect on Total Output and Capital, on per-worker-capital, output, investment and consumption. We fixate a bit on the effect on consumption as well - since we'll see the answer is not always so clear. And we discuss the forces that lead to convergence back to the steady state levels of per-capita-capital and per-capita-output.

More Videos on the Solow Model: https://sites.google.com/site/economi...
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