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Real Business Cycle models account for business cycle fluctuations as efficient responses to real economic exogenous changes or shocks

3 votes
1 answer
330 views

Consumption smoothing in RBC Model

I have the following inter temporal utility function: $U(t)=(\frac{s(t)}{1-\sigma})(c_t/c_{t-1}^\gamma)^{(1-\sigma)} - \chi*h(t)$ where $h(t)$ is the hours worked. I know that gamma is responsible …
Artur Mukhin's user avatar