The elasticity of intertemporal substitution is defined in a non- stochastic model with interest rate R as: = C2/C1d(C/C) dR/R Show that with power utility u(c) = c, the intertemporal substitution elas- ticity is equal to 1/7. (Hint: differentiate the first-order conditions). The elasticity of intertemporal substitution is defined in a non- stochastic model with interest rate R as: = C2/C1d(C/C) dR/R Show that with power utility u(c) = c, the intertemporal substitution elas- ticity is equal to 1/7. (Hint: differentiate the first-order conditions). The elasticity of intertemporal substitution is defined in a non- stochastic model with interest rate R as: = C2/C1d(C/C) dR/R Show that with power utility u(c) = c, the intertemporal substitution elas- ticity is equal to 1/7. (Hint: differentiate the first-order conditions).