In a steady state since capital stock is not changing, investment is equal to depreciation. If we substitute f(k*) for y and δk* for i, we can express steady-state consumption per worker as c* = f(k*) – δk* suggests that steady-state consumption is what is left of steady-state output after making provision for steady-state depreciation. This equation makes one point quite clear—an increase in steady-state capital has two opposite effects on steady-state consump­tion.
One is favourable, the other is not. On the positive side, more capital means more output. On the negative side, more capital also means that more output must be used to replace worn- out capital.