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The basic idea of dynamic life-cycle models is that individuals plan out their lifetime labour supply, given their expected lifetime environment. Explain the reasoning of
The basic idea of dynamic life-cycle models is that individuals plan out their lifetime labour supply, given their expected lifetime environment.
- Explain the reasoning of the dynamic life-cycle models of labour supply. What are the major elements and predictions?
- Compare the labour supply response that one would expect from a transitory, unanticipated wage increase and an evolutionary, anticipated wage increase.
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