**LS Ex11.3-(e)**

Although I've explained this part in TA session, that's totally incorrect!!

The solution explained in TA session is assumed that the productivity shift is unexpected. This excercise, however, is assumed that the productivity shift is anticipated..(First of all, if we consider "unexpected", the assumption that complete market exists is violated and it'll be complicated),

Therefore, the consumer considers the allocation of consumption such that

**consumption will be identical to the new steady state in the long run**.It implies that the initial consumption(c_0) must not be the value of the old steady state.(Otherwise, we can't reach the new steady state.I've explained this in LS Ex11-1.(e)).

My solution surely tells us whether c_t(k_t) increases or decreases compared to c_{t-1}(k_{t-1}), but we can't pin this down exactly. So

**forget about my solution.**.

In conclusion, the solution to this part doesn't tell us whether c_t(k_t) increases or decreases compared to c_{t-1}(k_{t-1}).As the solution to LS Ex11-1.(e), we just show only the transition path(i.e. Euler Equation and Resouce Constraint).And determination on {c_t,k_t} counts on Matlab.

I am very very sorry for telling you the incorrect solution. I make an effort not to do this again.

If you don't understand what I say, or have any question, come to my room at my OH (this Wednesday)

Finally, thank Mr,Ino for your suggestion.