Solving Consumption Models with Multiplicative Habits

  title={Solving Consumption Models with Multiplicative Habits},
  author={Christopher D. Carroll},
This paper provides derivations necessary for solving an optimal consumption problem with multiplicative habits and a CRRA ‘outer’ utility function, either for a microeconomic problem with both labor income risk and rate-of-return risk, or for a macroeconomic representative agent model.  2000 Elsevier Science S.A. All rights reserved. 
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