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Barro's equation 12.6 states the household's multiyear budget constraint including taxes and transfers: C1+ - * Itr Lit ... + (VI - TI) + (Ve-

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Barro's equation 12.6 states the household's multiyear budget constraint including taxes and transfers: C1+ - * Itr Lit ... + (VI - TI) + (Ve- T2) 1 +r - ... 1) Derive the multiyear budget constraint above (perhaps being slightly more clear than Barro about what's in the ellipses!) from the period budget constraint below, noting the relevant assumptions you make: Ct -p + AK + T = ( p) L + Vti ( p+ K) 2) Break up the equation into four coherent parts and label them. 3) Why isn't there a P under V2 or T2

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