Deterministic optimal growth model. Let 1- 7 A representative individual solves subject to f(k) max c...

 

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Deterministic optimal growth model. Let 1- 7 A representative individual solves subject to f(k) max c Jo 1-e-ak x fe-Pu(ci)dt k = f(ke) - ce (a) Write the appropriate Hamiltonian (b) State the solution for consumption as a function of the costate vari- able. [HINT: You might need to take a logarithm.] ko = k a (c) State the equation for the costate variable. (d) State the steady-state capital. (e) State the steady-state interest rate. (f) State the flow of profit in the steady state. (g) State the price of an equity share in the representative firm in the steady state. Deterministic optimal growth model. Let 1- 7 A representative individual solves subject to f(k) max c Jo 1-e-ak x fe-Pu(ci)dt k = f(ke) - ce (a) Write the appropriate Hamiltonian (b) State the solution for consumption as a function of the costate vari- able. [HINT: You might need to take a logarithm.] ko = k a (c) State the equation for the costate variable. (d) State the steady-state capital. (e) State the steady-state interest rate. (f) State the flow of profit in the steady state. (g) State the price of an equity share in the representative firm in the steady state.

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a The Hamiltonian is given by H uc fk ck b The optimal consumption choice can be found ... View the full answer