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rickecon / OGbequests

Overlapping generations model with calibrated bequests
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Add endogenous labor to model #1

Open rickecon opened 8 years ago

rickecon commented 8 years ago

Add endogenous labor to model with the following period utility function with constant Frisch elasticity of labor supply (CFE):

u(c{s,t}, n{s,t} = \frac{(c{s,t})^{1 - \sigma} - 1}{1 - \sigma} - \chi^n \frac{(n{s,t})^{1 + \theta}}{1 + \theta}

where \theta = 1 / \epsilon, and where \epsilon is the Frisch elasticity of labor supply. A central estimate of \epsilon from Reichling and Whalen is 0.4. That results in \theta = 2.5.

rickecon commented 8 years ago

If we have trouble with the functional form above, we can go to elliptical utility. @parkerrogers