All Questions
8 questions
3
votes
2
answers
201
views
Utility maximization for a household consisting of a woman and a man, with gender discrimination
Consider a household consisting of a woman and a man, with preferences over leisure and consumption given by:
$U(\overrightarrow{c},\overrightarrow{l}) = \ln{c} + \ln{l^F} + \ln{l^M}$
where $\...
- 2,351
4
votes
1
answer
175
views
What is the economic intuition of prudence in the static case?
How can we interpret a "prudent" agent in the static case (i.e., someone with $u'''(\cdot)>0$)?
I understand that in a dynamic setting, someone exhibiting prudence would do precautionary ...
- 83
1
vote
0
answers
193
views
Lagrangian in Ramsey model
I struggle to write and solve Lagrangian in the Ramsey model.
I have the following individual preferences with a budget constraint:
and an additional constraint that is a no-ponzi condition:
How to ...
- 11
2
votes
1
answer
316
views
Quadratic utility: monotonicity and risk aversion
I am taking macro class this fall. One of the problems asks whether decreasing absolute risk-aversion and ever-increasing consumption are two unattractive implications of the quadractic utility ...
- 95
3
votes
2
answers
725
views
How was CES utility function derived?
Is there any book/papers that I can refer to the proof (derivation) of the CES utility function?
Or if anyone could help me with the derivation, I will be so much grateful to you.
4
votes
1
answer
256
views
Indifference curve - Does $dU = 0$ hold in higher dimensions? / Problem of integrability
In two dimensions, we have on an indifference curve that $dU=0$.
Does this apply to indifference objects in higher dimensions?
I was thinking that if $dU > 0$, then one is moving to a higher ...
- 370
6
votes
1
answer
320
views
How is labor disutility modeled in Arrow-Debreu model?
In DSGE models, utility function contains labor disutility components. But I cannot not see how labor disutility is incorporated in Arrow-Debreu-Mackenzie model.
- 63
3
votes
1
answer
184
views
Is special case of utility function in "Intertemporal Substitution in Macroeconomics" also a special case of a Ramsey growth model utility function?
So in RBC and Ramsey-derived utility function, the following is usually the form of utility:
$$u(c,l) = c^{1-\sigma}(1 + \omega(l))$$
where $\omega(l)$ is arbitrary function of $l$, labor, that ...
- 31