Hi everyone,
I'd ask you to help me with some computations.
The problem is just math.
The problem set provides several hints but I'm stuck with the Taylor expansion.
That is what I've done:
ln[U'(ct)] = ln[ ((1+r)/(1+delta)) U'(ct+1)]
Then, I thought to expand { ln[U'(ct+1)] - ln[U'(ct)] } as follows:
ln[U'(ct+1-ct)] - ln[U'(ct-ct)] + d{ ln[U'(ct-ct+1)] - ln[U'(ct-ct] } * [ ct-1-ct+ct)
Then:
ln[U'(1)] - ln[U'(0)] + d{ ln[U'(1)] - ln[U'(0] } * (ct-1)
The outcome does not make sense. Any hint?
Thanks so much
I'd ask you to help me with some computations.
The problem is just math.
The problem set provides several hints but I'm stuck with the Taylor expansion.
That is what I've done:
ln[U'(ct)] = ln[ ((1+r)/(1+delta)) U'(ct+1)]
Then, I thought to expand { ln[U'(ct+1)] - ln[U'(ct)] } as follows:
ln[U'(ct+1-ct)] - ln[U'(ct-ct)] + d{ ln[U'(ct-ct+1)] - ln[U'(ct-ct] } * [ ct-1-ct+ct)
Then:
ln[U'(1)] - ln[U'(0)] + d{ ln[U'(1)] - ln[U'(0] } * (ct-1)
The outcome does not make sense. Any hint?
Thanks so much