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2) The representative agent lives for infinite periods (0,1,2,). Each period, the agent consumes (ct) and supplies labor (lt). The pre-tax real wage per unit
2) The representative agent lives for infinite periods (0,1,2,). Each period, the agent consumes (ct) and supplies labor (lt). The pre-tax real wage per unit of labor is wt and the agent pays a tax rate of t. The lifetime present discounted value of utility is given by: t=0tu(ct,lt) with (
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