Questions tagged [representative-agent]
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4
questions
2
votes
1answer
623 views
Euler's Theorem
Can anyone give me connection and intuition behind each of the following euler's equation-
Euler's equation in production function represents that total factor payment equals degree of homogeneity ...
1
vote
1answer
182 views
Perpetual Youth Model
I am reading the famous paper of Blanchard,1985. There are some fundamental stuff that I did not really get.
1) Why they call it "perpetual youth"?
2) On page 225, he mentions the cohort size. So, ...
3
votes
1answer
85 views
Use Lag Operator to find Lifetime Budget Constraint
The budget constraint is
$c_t + \tau_t + s_{t+1} =w_t(1-l_t) +(1+r_t)s_t$
And assume
$\underset{t \longrightarrow \infty}{lim} \ \displaystyle{\frac{s_t}{\Pi_{i=1}^{t-1} (1+r_i)}} = 0$
Lag ...
5
votes
1answer
120 views
How, with complete markets, do we have a representative agent?
I've read several texts stating that with a complete market assumption, there's always a representative agent lurking. How is it that by assuming complete markets, we're able to prove the existence of ...
