Aria is an economy with constant population. Each person is endowed with a certain amount of goods y₁ when young, and very little amount of goods y2 when old. People would like to consume more than they have in the second period of life. Assuming a stationary allocation, find the feasible set in this situation.
Aria is an economy with constant population. Each person is endowed with a certain amount of goods y₁ when young, and very little amount of goods y2 when old. People would like to consume more than they have in the second period of life. Assuming a stationary allocation, find the feasible set in this situation.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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