Colciago, Andrea; Muscatelli, V. Anton; Ropele, Tiziano; … - 2006
function
E
0
∞
X
t=0
β
t
£
exp(ε
c
t
)u
¡
C
i
t
−bC
i
t−1
¢
−exp
¡
ε
h
t
¢
v
¡
h
i
t
¢¤
(1)
for i = rt,o. E
t
denotes the … words, (1) is maximized subject
to the sequence of budget constraints
X
t+1
1+R
t
+P
t
(C
o
t
+i
t
)=X
t
+A
t
+
£
r
k
t
u
t …-contingent security market, φ
t
represents firms’ real profits.
X
t
denotes time t holdings of riskless nominal bonds issued by home and …