Answer to Question #280950 in Economics for Aana

Question

consider an overlapping generation in which individuals live for 2 periods. Every period a constant number of N young individual are born. Each individual endowed with the y units of single consumption when young, when nothing when old. the consumption good is non-storable. the valued stock of flat money, involves each period according to Mt = zMt-1, where z > 1. the government uses the receipts from the newly printed money to make lump-sum tranfers to every young individual.

(a) write down the feasibility constraint that a central planner would face. Considering the set of stationary allocations, draw the resource constraint.

Answer 1

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