FIGURE 8-10: Increasing Saving When Starting With Less Capital Than in the Golden Rule Steady State This figure shows what happens over time to output, consumption, and investment when the economy begins with less capital than the Golden Rule level and the saving rate is increased. The increase in the saving rate (at time t₀) causes an immediate drop in consumption and an equal jump in investment. Over time, as the capital stock grows, output, consumption, and investment increase together. Because the economy began with less capital than the Golden Rule level, the new steady state has a higher level of consumption than the initial steady state.