(b) Derive the consumption function for this case, $$ C 1 left( frac 1 r 2 r ight) Y 1 left( frac 1 2 r ight) Y 2 $$ Show that ( C 2 C 1 ) using this consumption function and the current account identity ...

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(b) Derive the consumption function for this case, $$ C_1 = left( frac{1 + r}{2 + r}...

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(b) Derive the consumption function for this case,

$$ C_1 = \left( \frac{1 + r}{2 + r} \right) Y_1 + \left( \frac{1}{2 + r} \right) Y_2. $$

Show that $ C_2 = C_1 $ using this consumption function and the current account identity.

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Foundations Of International Macroeconomics

ISBN: 9780865716513

1st Edition

Authors: Rogoff, K.

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Question Posted: Nov 13, 2024 03:00 AM

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(b) Derive the consumption function for this case, $$ C_1 = left( frac{1 + r}{2 + r}...

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Foundations Of International Macroeconomics

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