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Exercise 7 Consider the following economic model. Time is represented by a countable infinity of time periods, each denoted by t 2 {0, 1, 2,
Exercise 7 Consider the following economic model. Time is represented by a countable infinity of time periods, each denoted by t 2 {0, 1, 2, ...}. In any given period, there is a worker that can be in one of two states: either unemployed and earning unemployment benefit b 2 R, or employed and earning wage w 2 {wL, wH} forever, wh
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