Consider the optimal saving-consumption problem under certainty, as presented at the beginning of Sect. 3.4. Show that

Question:

Consider the optimal saving-consumption problem under certainty, as presented at the beginning of Sect. 3.4. Show that the optimal saving \(s^{*}\) is increasing with respect to the risk free rate \(r_{f}\) if the coefficient of relative risk aversion is less than one.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: