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The Ramsey economic growth model is a social planner problem which is to maximize the utility subject to resource constraints. Formally, >B'U(c) subject to
The Ramsey economic growth model is a social planner problem which is to maximize the utility subject to resource constraints. Formally, >B'U(c) subject to + k1 = (1 8)kt + f(k) max Ct,kt+1 t=0 where B is a discount parameter, U is the utility function, 8 is the depreciation rate and f is the production function. Use the Lagrangian multiplier method to write down the first order condition.
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Finite Mathematics and Its Applications
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
12th edition
978-0134768588, 9780134437767, 134768582, 134437764, 978-0134768632
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