1 Note that the method sketched here is a generalization of the Lagrange multiplier method used in Chapter 2. An explanation of the Maximum Principle based mainly on pure economic intuition can be found in Dorfman (1969). Other excellent sources are Dixit (1990) and Intriligator (1971). See also the Mathematical Appendix.

'Pstment by firms that was rnment can use tax incenaccumulation.

This is an a relative price in order to low do anticipation effects 2

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