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CRRA Utility Function

differential of CRRA utility function

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modasa905
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43 views1 page

CRRA Utility Function

differential of CRRA utility function

Uploaded by

modasa905
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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o

Relative Risk Aversron : The rate change in

marginal utility with respect to the rate of change


in consumption .

( du' ( c )/ u "

yu
RBA ≡ -
' ( o. c

Ac -
=

1 a(

where C -
consumption ,
u
( .) :
utility function .

F- -
.

CRRA Utlityfunction :u (

)=
θ
←θ
'
"
U ( )= (
- µ ( )= - θ

C
.

t
o θ
acgu
"( ) ,
RRA =

- = Ooustant
- C

-
.

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