Consider the following description of preferences constraints and production respectively for a two- psriod decentralised economy: at = lnicfi'l + :3 Inc-i) Cg =}'D_k$l cf=sl+kifl+r} IIEET=AkaJE where u is discounted lifetime utility: in is the natural logarithm: :3 and of refer to consumption demand in time periods [f and 1; El s: l3 s: l is a fixed parameter: ya :1:- {l [fixed parameter} and y] radar to output in time periods {i and l; s] is profits in time period 1; is} is the supply of the capital stock at the start of time period 1; r is the net interest rate: A :r [f is a fixed parameter: k',' is the capital demand of the firm: and {i s: o: c: i is a fixed parameter