Question: 1) Both the internal and external habitat models have a penalty built in for going below current consumption, how does each specification affect the decision

1) Both the internal and external habitat models have a penalty built in for going below current consumption, how does each specification affect the decision process?

2) In the continuous time pricing kernel. Where does the specific distribution of the risk neutral process fit in? in other wordsif I have a geometric Brownian motion, how would I know that in the dM/M equation?

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