Overlapping generation..

3 OLG with population growth Consider an overlapping generations economy with agents who live for two periods. Each agent maximizes her own utility, given by log(c ) + log(ci+1), for t, g = 1, . . . 00. Also there are initial old generations (g = 0) whose utility is given by log(c!). Agents are endowed with non-storable consumption goods in each period given by er = J ey(> 0), when young co(> 0), when old There is a population growth, net = (1 + y)n, and no = 1 where n is the population of the young at t. (1) Define the sequential market equilibrium without money. Clearly define the market clearing condition(s). (2) Calculate the real interest rate in the equilibrium defined above. (3) Find the condition for y where the competitive equilibrium is not Pareto optimal. Show your work