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Assume that = 3, and therefore the are three periods, = 1,2,3. There is aninitial level of government debt equal to 0, inherited from the
Assume that = 3, and therefore the are three periods, = 1,2,3. There is aninitial level of government debt equal to 0, inherited from the past, for whichinterest payments are due in the first period. The interest rate is constant overtime and equal to . Write down the government budget constraint faced by thegovernment in each period
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