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Consider the capital taxation model seen in class. Assume that the the utility function of the representative consumer is U(c1 c2, l) = log(c1 c2)
Consider the capital taxation model seen in class. Assume that the the utility function of the representative consumer is U(c1 c2, l) = log(c1 c2) l, the endowment in the 1st-stage is 0.5, the gross return on the storage technology is 1.05 (i.e., R = 1.05), and that the government wants to raise 0.075 units (i.e., G = 0.075)
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