What is the Golden Rule level of capital aimed at maximizing?

The Golden Rule level of capital is aimed at maximizing consumption per worker, ensuring that the economy operates at a level of capital where the marginal product of capital equals the growth rate of the economy. This concept is derived from the Solow growth model, which emphasizes that the optimal amount of capital accumulation, over time, is the one that maximizes the consumption enjoyed by workers. In this context, consumption per worker reflects the standard of living and overall well-being of individuals in the economy.

By focusing on consumption per worker, the Golden Rule level recognizes that while investment in capital can increase output, the primary goal of economic growth is to enhance people's quality of life. Thus, it is essential to strike a balance between saving and investing in capital goods and allowing for a level of consumption that will sustain economic growth while maximizing the welfare of individuals. This contrasts with other options, which do not encapsulate the essential goal of the Golden Rule, namely improving individual consumption rather than total production capacity or government efficiency.