Necessary and sufficient conditions for representative individual existence in a Ramsey-type model (Q357908)

The paper represents a development of a modified Ramsey model suggested by \textit{A. V. Rudeva} and \textit{A. A. Shananin} [Differ. Equ. 45, No. 12, 1835--1839 (2009); translation from Differ. Uravn. 45, No. 12, 1799--1803 (2009; Zbl 1184.91142)] that describes the behavior of a single (representative) household with a liquidity constraint. The household's money resources \(x\) are divided into cash \(M\) and deposits \(D\), and its income consists of wages \(S(t)\) and dividends on deposits. To ensure continuity in consumer spending \(C(t)\), it reserves a required amount of cash: \(M(t) \geq\theta C(t)\). The household maximizes its future consumption utility \(U(C(t)) = C^\alpha(t)\), discounted with a coefficient \(\Delta\). So, it is characterized by its initial capital \(x_0\), wages \(S\), the discount factor \(\Delta\), and a coefficient of risk aversion \(\alpha\). The paper's development proceeds in two directions. Firstly, the investigation of this variational problem fulfilled by Rudeva and Shananin is advanced with respect to the construction of a synthesis of demand for cash \(M(\Delta, x)\). Secondly, the problem of aggregation of heterogeneous households along with finding conditions for the existence of a representative individual is considered. Heterogeneity is understood concerning discounting. Correspondingly, the problem is to find a discount factor \(\Delta\) of a household at which (if it exists) the household, having total money resources and wages, reserves the common cash \(M\). The author considers the infinite variant of aggregation where the continuous set of households differs by the initial wealth \(x\) and discount factor \(\Delta\). The description of the problem in this part is ambiguous. Reviewer's remark: The level of presentation of the aggregation problem is very low. The basic function of wage distribution is presented inconsistently.