Consider again the optimal consumption and asset holding plans of households with preferences ED 2:20 tu(ct) where u(ct) = we, (1/2)th , 0 S ct
Consider again the optimal consumption and asset holding plans of households with preferences ED 2:20 tu(ct) where u(ct) = we, (1/2)th , 0 S ct 0, does the actual consumption depend on do? - How much wealth an do we need to be unconstrained? - Is actual consumption more sensitive to changes in current wealth if we are still liquidity constrained
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