Question: Solve the intertemporal Euler equation for the case that (1 + ) = 1 and (+ ) = 1 2 (+ ) 2 . Show

Solve the intertemporal Euler equation for the case that (1 + ) = 1 and (+ ) = 1 2 (+ ) 2 . Show that under these two assumptions, consumption follows a random walk. Explain the role of quadratic utility at driving this result, and why it doesn't hold for general utility functions

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