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Consider the following two-period problem for the representative consumer Y = 50 T=5 Y2 = 20 T = 10 r = 0.10 C = consumption
Consider the following two-period problem for the representative consumer
Y = 50
T=5
Y2 = 20
T = 10
r = 0.10
C = consumption in the first period
C2 = consumption in the second period
S saving in the first period
U(C1, C2) min (C1, C2}
What is the optimal saving, S*, that maximizes the representative consumer's lifetime utility?
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