How to stationarize an endogenous discount factor
Posted: Fri Jun 12, 2015 8:52 pm
Hi Suppose that I have a model in which TFP is increasing, call the TFP: At,
and Consumption Ct is increasing at the same order with TFP, thus Ct/At is stationary
How do I stationarize an endogenous discount factor
v(Ct,Lt)=ln(1+psi*[Ct^alpha*(1-Lt)^(1-alpha)])
Some literature uses this kind of endogenous discount factor in their utilities, but I never found any way to stationarize v(Ct,Lt).
and Consumption Ct is increasing at the same order with TFP, thus Ct/At is stationary
How do I stationarize an endogenous discount factor
v(Ct,Lt)=ln(1+psi*[Ct^alpha*(1-Lt)^(1-alpha)])
Some literature uses this kind of endogenous discount factor in their utilities, but I never found any way to stationarize v(Ct,Lt).