Re: DSE 2013 Doubts

Posted by rmabides on Jun 25, 2014; 12:21pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2013-Doubts-tp7590991p7593593.html

Series 01 : question 32.

It is related to inter-temporal consumption. So the solution will entail

C1(1+r) + C2 = Y1(1+r) + Y2

c1 = 1/2 , c2 = (beta)? , y1 = -1/2 (?) , y2=1

Where do i go wrong?

Also, what happens in the case with N agents with different discount factors?