hw9 - Homework 9 (Due November 15) 1. Refer to the part of...

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Homework 9 (Due November 15) 1. Refer to the part of “Finance public services with zero debt” in PPT12. Let N = 100 , β =0 . 5 , A t =4 all t , K 0 =50 ,and G =100 . (1) Under policy 1 (tax old), compute k t , y t and c ot +1 ,for t =0 , 1 , 2 .A l so , compute the steady state values of k , y , each old person’s consumption, and each person’s generational account. (2) Under policy 2 (tax young), compute k t , y t and c ot +1 ,for t =0 , 1 , 2 . Also, compute the steady state values of k , y , each old person’s consumption, and each person’s generational account. (3) Explain why two policies lead to di f erent results. 2. Refer to the part of “Finance public services by de f cit” in PPT12 and use numbers from Question 1. (1) Under the f scal policy there, compute k t , y t and c ot +1 ,for t =0 , 1 , 2 . Also, compute the steady state values of k , y
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This homework help was uploaded on 12/13/2007 for the course ECON 3140 taught by Professor Mbiekop during the Fall '07 term at Cornell University (Engineering School).

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hw9 - Homework 9 (Due November 15) 1. Refer to the part of...

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