### Solow Growth Model - Solving for Steady State

 Part E - Using the Solow Model and Diagram (c)   See page 102, particularly page 105 (of Jones Macro Econ Crisis Update Ed)(d) is below The incantation of a steady state is the following: “A steady state is a value, , such that This implies that "      where (). Take the two equations above, and establish the steady state. Equation One – the Capital Accumulation Equation  (aka, the Law of Motion of Capital)                                 ,    this is our equation (1) Equation Two – The production function                                     ,    this is our equation (2) Now – combine (1)  & (2), and solve for Capital                                    You can see that the steady state level of capital () depends on all the stuff in the right-hand-side:          the savings rate.          If          , the depreciation rate,   If (d) we are just plugging numbers in                        (assuming I didn’t make a maths mistake along the way)