Abstract
This paper aims to study the behavior of the average rational consumer of an economy populated by heterogeneous agents in a finite horizon framework, Heterogeneity takes into account both the subjective discount rate and risk aversion coefficient. Closed-form solutions for the optimal paths of consumption and capital, of the average consumer. are derived. Moreover, a closed form solution for the economic welfare of the average consumer is obtained.
Original language | English |
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Pages (from-to) | 842-849 |
Number of pages | 8 |
Journal | Economics Bulletin |
Volume | 34 |
Issue number | 2 |
State | Published - 2014 |