Nonlinear Dynamics in Equilibrium Models pp 195-233 | Cite as

# Intertemporal Complementarity and Optimality: A Study of a Two-Dimensional Dynamical System

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## Abstract

The theory of optimal intertemporal allocation has been developed primarily for the case in which the objective function of the planner or representative agent can be written as \(U(c1, c2\ldots) \equiv {{{\sum}^\infty}_{t=1}} {{\delta}^{t-1}}w(c_{t})\) where *c* _{t} represents consumption at date t, *w* the period felicity function, and \(\delta\,\,\epsilon\) (o,1) a discount factor, representing the time preference of the agent.

## Keywords

Utility Function Euler Equation Discount Factor Characteristic Root Optimal Program
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