II. Module 4 Homework [final]: Equity Premium and Macroeconomics
- Due No due date
- Points 18
- Questions 9
- Time Limit None
Instructions
Write the continuous time habit model with utility
and
where
(This is slightly different from the continuous time model I wrote in the lecture overheads notes. Use this one. I made the notation more similar to the paper here.)
We'll redo some of the simple calculations of the paper in continuous time. This gives you a review of the model and some practice
with continuous time.
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