Consider again the canonical OLG model with log preferences and a Cobb-Douglas production function, but assume that individuals now work in both periods of their lives. (a) Define a competitive equilibrium and the steady-state equilibrium. (b) Characterize the steady-state equilibrium and the transitional dynamics in this economy. (c) Can this economy generate overaccumulation?
Consider again the canonical OLG model with log preferences and a Cobb-Douglas production function, but assume that individuals now work in both periods of their lives. (a) Define a competitive equilibrium and the steady-state equilibrium. (b) Characterize the steady-state equilibrium and the transitional dynamics in this economy. (c) Can this economy generate overaccumulation?
Chapter1: Introducing The Economic Way Of Thinking
Section: Chapter Questions
Problem 13SQ
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Consider again the canonical OLG model with log preferences and a Cobb-Douglas production function, but assume that individuals now work in both periods of their lives.
(a) Define a competitive equilibrium and the steady-state equilibrium.
(b) Characterize the steady-state equilibrium and the transitional dynamics in this economy.
(c) Can this economy generate overaccumulation?
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