hi
Dear professor jpfeifer:
we want to investigate the effect of the demand side policies on food consumption.
The small open economy is populated by infinitely-lived households. They consume © and supply labor (L) and real cash holdings (m). The consumption bundle consists of domestic (D) and an imported good (I). Each kind of good consists of two varieties: food (F) and non-food (M).
so we have:
Households maximize the expected present discounted value of utility subject to the budget constraint of
the household:
my question is:
Can we investigate the effect of the demand side policies on food consumption with this model through the consumption bundles or we must change the model?
[Must we change C in the households utility function to CF (food consumption) and CM (Non_food Consumption) ?]