(d) Suppose that the young can borrow and their endowment grows according to Y+1 =(1+g)y. However yo=0...
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(d) Suppose that the young can borrow and their endowment grows according to Y+1 =(1+g)y. However yo=0 and y remain constant over time. How does the date saving rate depend on g? Do the same exercise assuming it is the endowment of the middle aged that grows at rate g while those of the young and old stay constant. Dynamic inefficiency and trade.
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