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Real Intertemporal Model with Investment Given the Cobb Douglas Production Function Y= KN1- and the law of motion of Capital K=(1- d)K+I. Derive the current

Real Intertemporal Model with Investment

Given the Cobb Douglas Production Function Y= KN1- and the law of motion of Capital K=(1- d)K+I. Derive the current investment (I) of the firm in function of Y K, a, r and d. Knowing that the optimal investment decision of the firm in equilibrium is MPK=r+d.

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