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he Real Business Cycle Model [35 Points] Consider the social planner problem of the real business cycle model max E0 X t=0 t log ct
he Real Business Cycle Model [35 Points] Consider the social planner problem of the real business cycle model max E0 X t=0 t log ct l2 t 2 s.t. ct = ezt lt zt = t, t N (0, 1) The parameters satisfy [0, 1), 0. Note that this formulation implies = 0. 1. Derive the labor demand curve from the firm's maximization problem: max lt ezt lt wtl
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