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TAsection03 - ~ c t = c t(1 g t ~ k t = k t(1 g t 1.4...

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TA section 04 February 15, 2009 1 Neoclassical Growth problem with labor Social planner°s problem in per capita term is the following: max f c t ;k t +1 ;l t g 1 X t =0 ° t (log c t + ± log (1 ° l t )) c t + k t +1 = k ° t ° (1 + g ) t l t ± 1 ° ° + (1 ° ² ) k t 1.1 Lagrangian setup 1.2 FOC Derive FOCs 1.3 Stationary equilibrium conditions Derive Stationary equilibrium conditions, i.e. rede±ne variables by
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Unformatted text preview: ~ c t = c t (1+ g ) t ; ~ k t = k t (1+ g ) t . 1.4 Steady State conditions Derive steady state values for ~ c; ~ k; l 1.5 Log-linearization Log-linearize using ~ x t = ~ xe ^ x t where ^ x t = log ~ x t & log ~ x 1...
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