Brock, William (contributor); … - 2008
consumers at z rent out their capital at rate r(t,z), and
profits π(t,z)=f (x(t,z),X
e
(t,z)) − r(t,z)x(t,z) are distributed … lump sum.
Consumers maximize discounted sum of utilities, while representative firms hire
capital to maximize profits by …(t,z),X
e
(t,z)) − r(t,z)x(t,z)+s(t,z)x(t,z), with f
x
= r − s in profit
maximizing equilibrium. Subsidies are paid by consumers …