n the Swan-Solow model what is the ‘golden’ saving rate and what is the significance of the actual saving rate exceeding it?

In the Swan-Solow model, the 'golden' saving rate is the rate of saving that maximizes the steady-state level of consumption per worker. It is the optimal saving rate that allows for the highest level of consumption in the long run.

The significance of the actual saving rate exceeding the 'golden' saving rate is that it leads to a higher capital per worker ratio, which in turn leads to a higher output per worker. However, this also means that there is less consumption in the short run because more of the output is being saved and invested rather than consumed.

In the long run, if the saving rate is maintained above the 'golden' rate, it will lead to a lower level of consumption per worker. This is because the additional capital becomes less productive due to diminishing returns, and the increased output is more than offset by the decrease in consumption due to the higher saving rate.

Therefore, while a higher saving rate can lead to higher output, it does not necessarily lead to higher consumption in the long run. This is the trade-off that the Swan-Solow model illustrates.