Question
For the remaining questions assume there are two consumers who each have log utility and no discounting (U=lnc1+lnc2). They differ in their incomes. Consumer A
For the remaining questions assume there are two consumers who each have log utility and no discounting (U=lnc1+lnc2). They differ in their incomes. Consumer A has y=800 in period 1 and 1200 in period 2. Consumer B has y=1000 in both periods. Is the equilibrium interest rate above or below 0?
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Edition
134519574, 9780134521046 , 978-0134519579
