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Can someone help me solve this question? Thank you! 2. Consider a variant of the OLG model with money we saw in class. An individual
Can someone help me solve this question? Thank you!
2. Consider a variant of the OLG model with money we saw in class. An individual in this economy lives for two periods. The individual is young in period t and old in period t + 1. Each individual is endowed with yl when young and ya when old. The endowment yg is assumed to be small such that an individual always wants to consume more than yg when old. For simplicity, assume that the population (Nt) and the money stock (Mt) are both constant such that n = 0 and (f) = 0 where N; = (l + n)N3_1 and M: = (1 + )ME_1. The government in this economy nances its expenditure G: by imposing a lumpsum tax (T) on each young person such that G; 2 N37" Given that the utility function of a typical agent is: \"(31,t552,t+1) = 11161,: + 1311102,t+1, 0Step by Step Solution
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