Unformatted text preview: < γ < 1 be government’s discount factor across generations. Government objective is to maximize ∞ X t =0 γ t U t Exercise: Show that, in this environment, implementability constraint for generation t is the following U c t, c t, + U l t, l t, + β ( U c t, 1 c t, 1 + U l t, 1 l t, 1 ) = 0 (38) 27...
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- Fall '10
- Calculus, Following, Trigraph, Generation, wt zj lt−j,j