Question: Hall (1978) also suggests (but does not estimate) a model with the constant-relative-risk-aversion utility function $$U(C) = C^{gamma}/gamma$$. (a) What is the Euler equation for

Hall (1978) also suggests (but does not estimate) a model with the constant-relative-risk-aversion utility function $$U(C) = C^{\gamma}/\gamma$$.

(a) What is the Euler equation for such a model?

(b) Consider the parameter value $$\gamma = 0$$ in this Euler equation.

(c) What problems does this pose for this model?

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