The country of Syldavia satisfies the assumptions of the basic Solow model. There is no population growth nor any technological progress. The production function is Y = AK^3 L^3. Using the notation from class, the parameters A, s, δ, and the labor force Lt = L have been constant for many years up to and including 2020. The economy is at the steady state.
Suddenly, in 2020, a meteorite crashes on the country, and luckily does not destroy any installed capital nor does it kill anyone. What a piece of luck! Furthermore, the meteorite turns out to contain a uniquely strong and malleable metal, adamantine. This immediately and permanently reduces the depreciation rate of all installed capital to a new (lower) level δ* = 2δ.
(a) Explain qualitatively (in words) why this is a good thing for Syldavia in 1-2 sentences.