Rudebusch, Glenn D. (contributor); … - 2008
household chooses
state-contingent plans for consumption, c, and labor, l, so as to maximize expected utility:
maxE0
1X
t=0
tu … state-contingent constraints (3) and (8),
that is, maximize:
L V0;s0
1X
t=0
X
st
t;st
8
<
:Vt;st u(ct;st;lt;st)
X …
st+1
st+1jstV1 t+1;st+1
!1=(1 )9=
;
1X
t=0
X
st
t;stfpt;stat;st +Pt;stct;st wt;stlt;st dt;st pt;stat 1;stt 1g: (9 …