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1) The dynamic general equilibrium (DGE) methodology discussed in class in the context of a simple model of capital accumulation (the centralized model) has been
1) The "dynamic general equilibrium" (DGE) methodology discussed in class in the context of a simple model of capital accumulation (the "centralized" model) has been employed to study many interesting questions in macroeco- nomics. One of these areas is the study of optimal government finance. Consider the following simple dynamic optimization model. 1=00 Ulifetime = > B*{log(ct) + clog(1 -4)} 0
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