Housing Bubbles by Sergi Basco

Author:Sergi Basco
Language: eng
Format: epub
ISBN: 9783030005870
Publisher: Springer International Publishing

(4.5)

(4.6)

The problem of agents in country U is different. Young agents in country U can borrow as much as they want, which implies that the borrowing constraint (Eq. R6) is no longer relevant. That is, agents maximize their lifetime utility subject only to the intertemporal budget constraint (Eq. R5). By using functional forms, we could derive closed-form solutions of the level of housing and consumption chosen by the agent. For the purpose of this book, let us just assume that the housing and consumption choices are given by and , respectively. Given this solution, we can use Eqs. (R1) and (R3) to recover the implied savings and borrowing choices. That is, from (R1), we obtain the borrowing of the agent, , and from (R3) we obtain the savings, .3 Therefore, we can represent the optimal saving and borrowing choices of the agent as,

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.