Study of intertemporal utility maximization

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In our study of intertemporal utility maximization, everything (initial and ending wealth, interest rate, and consumption) in the budget constraint is expressed in real terms. Reformulate the budget constraint in nominal terms and show that for a two-period planning horizon, the intertemporal budget constraint in nominal terms is equivalent to the one in real terms that we studied in class.

Reference no: EM13889079

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