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20—9) ){fi 1+1}0 (1+13)1(1+r) (note: The equilibrium interest rate can be analytically solved from this equation because it is a quadratic equation with regard to 1+4″) yB+2+fi z2 } 1+[3 (1+r)2 0 Compared to the endowment economy

Originally posted 2022-08-04 21:17:04. the equilibrium interest rate is higher in the production economy because the bond supply curve shifts to the right due to the newly added term %(1ffl2. (See the next slide for graphical illustration.) text f ) Euler equation :...