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lectures/tax_smoothing_1.md

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@@ -118,7 +118,7 @@ matrix Riccati equations that pin down $N$ value functions and
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$N$ linear decision rules, applying to the $N$ Markov
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states.
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## Public Finance Questions
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## Public finance questions
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{cite}`Barro1979` is designed to answer questions such as
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plt.show()
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```
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## Python Class to Solve Markov Jump Linear Quadratic Control Problems
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## Python class to solve Markov jump linear quadratic control problems
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To implement the extension to the Barro model in which $p_{t,t+1}$
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varies over time, we must allow the M matrix to be time-varying.
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The class also contains a method that simulates a model.
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## Barro Model with a Time-varying Interest Rate
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## Barro model with a time-varying interest rate
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We can use the above class to implement a version of the Barro model
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with a time-varying interest rate.

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