DURABLE CONSUMPTION AS A STATUS GOOD: A STUDY OF NEOCLASSICAL CASES



Ni =


cμμα


,/


θi [(1 + δ) + θi


1(i


Φsoe(θi)


Φsoe(θi)


) Qi = ΩSoe


(i


Φsoe(θi)


Φsoe(θi)


)q*,


(A14b)


where:

e.. μα

φ1'β+δ)- θi,      ωs°∙ θθi [           θil

are the solution coefficients for the small open economy case. To solve for the constants
Q
i and complete the solution of (A13a)-(A13d), we use the fact that the stock of durable
goods and net debt evolve continuously from their initial conditions, a(0) = a
o and n (0) =
n
o. From (A13b, d) this gives us the two equation system

zΦsoe1)∖              ,    /ɪ - Φsoe2)∖

h + Ωs1oe (θι) ——-ʌ-ɪʌ Qi + Ωs2oe (θ2) ——-V2 Q2 = ao,    n + Qi + Q2 = no,

1 V 1' у  Φs°e(θ1)   J 2       2 V 2, у  Φs°e(θ2)   ) 22 θ,                  22     θ,

(A15a)

from which we solve Qi, Q2 as:

Φsoe(θ1)Φsoe(θ2) [-(a - ao) + Ωs20e (θ2) ./Z ' (h - no)]
Q1 = Ωs1oe (θ1) Φsoe(θ2) [1 - Φsoe(θ1)l - Ω2oe (θ2) Φsoe(θ1) [1 - Φsoe(θ2)l,

_ [Φsoe(θ1)Φsoe(θ2)(a - ao) - Ωs1oe (θ1) Φsoe(θ2)[1 - Φsoe(θ1)l(n - no)l

Q2 = Ωs1oe (θ1) Φsoe(θ1) [1 - Φsoe(θ1)l - Ωs2oe (θ2) Φsoe(θ1) [1 - Φsoe(θ2)l ■

(A15b)

Substitution of equations (A15b) into (A14b) and the resulting expressions into (A13a)-
(A13d) yield the stable solutions for
(φ, a, μ, n) in the small open economy with an upward-
sloping supply function of debt.

34



More intriguing information

1. The Mathematical Components of Engineering
2. Performance - Complexity Comparison of Receivers for a LTE MIMO–OFDM System
3. The name is absent
4. Climate Policy under Sustainable Discounted Utilitarianism
5. Credit Markets and the Propagation of Monetary Policy Shocks
6. DISCUSSION: ASSESSING STRUCTURAL CHANGE IN THE DEMAND FOR FOOD COMMODITIES
7. XML PUBLISHING SOLUTIONS FOR A COMPANY
8. The name is absent
9. Has Competition in the Japanese Banking Sector Improved?
10. Computing optimal sampling designs for two-stage studies