An overlapping generations model

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Suppose in an overlapping generations model, two goods are produced. The young can produce both goods while the old can produce none. a) Assuming that both goods depreciate completely at the end of each period and there is no money in the economy, what is the optimal allocation for the young and old generations? b) Is this Pareto optimal? c) Suppose one of the goods only depreciates at 50%. What are the new allocations?

Reference no: EM13712375

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