Timeline for Exercise 8.8 Ljungqvist and Sargent, Corner Solutions
Current License: CC BY-SA 4.0
8 events
| when toggle format | what | by | license | comment | |
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| Dec 2 at 13:32 | vote | accept | Joseph Basford | ||
| Dec 2 at 13:32 | comment | added | Joseph Basford | Very nice. Thank you for taking the time to write it out, it makes complete sense. Just to highlight a small notational difference, where you've written $q$ for consumption, I had $c$ for consumption and $q$ for the price of Arrow-Debreu securities, but it doesn't matter as it's clear anyway. Thank you again! | |
| Nov 26 at 16:07 | comment | added | tdm | Ok, I made some changes. Sorry for the confusion. Anyway, the model needs to be closed using the budget constraints of the consumers. | |
| Nov 26 at 16:06 | history | undeleted | tdm | ||
| Nov 26 at 16:06 | history | edited | tdm | CC BY-SA 4.0 |
deleted 116 characters in body
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| Nov 26 at 8:38 | history | deleted | tdm | via Vote | |
| Nov 25 at 17:35 | comment | added | Joseph Basford | Thank you for your answer! I haven’t had time to look at it properly yet, but from a glance I think you’re assuming both types of consumer have the logarithmic utility. However one has a “risk-neutral” intra-period utility function and one has logarithmic. I think the exercise is meant to focus on the impact of corner solutions on interest rates which are generated by violations of the Inada conditions. | |
| Nov 25 at 16:47 | history | answered | tdm | CC BY-SA 4.0 |