Characterize the aggregate equilibrium dynamics

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Characterize the aggregate equilibrium dynamics and the dynamics of wealth distribution in the OLG model with warm glow preferences as in Section 9.6 when the per capita production function is given by the Cobb-Douglas form f (k) = Ak^α. Show that away from the steady state, there can be periods during which wealth inequality increases. Explain why.

Reference no: EM131135963

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