@@ -194,26 +194,25 @@ from the allocation
194194
195195The primal approach uses four steps:
196196
197- 1. Obtain first-order conditions of the household's problem and solve them for :math: `\{ q^0 _t(s^t), \tau _t(s^t)\} _{t=0 }^\infty ` as functions of
197+ 1. Obtain first-order conditions of the household's problem and solve them for :math: `\{ q^0 _t(s^t), \tau _t(s^t)\} _{t=0 }^\infty ` as functions of
198198 the allocation :math: `\{ c_t(s^t), n_t(s^t)\} _{t=0 }^\infty `
199199
200- 2. Substitute these expressions for taxes and prices in terms of the allocation
200+ 2. Substitute these expressions for taxes and prices in terms of the allocation
201201 into the household's present-value budget constraint
202202
203- * This intertemporal constraint involves only the allocation and is regarded
204- as an *implementability constraint *
203+ * This intertemporal constraint involves only the allocation and is regarded
204+ as an *implementability constraint *
205205
206- 3. Find the allocation that maximizes the utility of the representative household
206+ 3. Find the allocation that maximizes the utility of the representative household
207207 :eq: `TS_prefr_opt_tax ` subject to the feasibility constraints :eq: `feas1_opt_tax `
208208 and :eq: `TSs_techr_opt_tax ` and the implementability condition derived in step 2
209209
210- * This optimal allocation is called the **Ramsey allocation **
210+ * This optimal allocation is called the **Ramsey allocation **
211211
212- 4. Use the Ramsey allocation together with the formulas from step 1 to find
212+ 4. Use the Ramsey allocation together with the formulas from step 1 to find
213213 taxes and prices
214214
215215
216-
217216The Implementability Constraint
218217^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
219218
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