Approach:
-Show that the profit function is a multiple of kapital input. Call this multiple R_k(z,w)
-Give a label to the natural borrowing limit
-rewrite consumer problem to take advantage of these substitutions
-make assumptions on optimum and verfiy them somehow
The Recursive equilibirum, given intital asset distribution, is
-value function
-policy functions
-pricing kernels
-beliefs about the evolution of the overall asset distribution
such that
-v achieves the maximum in the the consumer's FE, given beliefs
-the policy functions solve the same FE
-markets clear
-beliefs are accurate (how?!)
If time, rewrite problem by putting R on the left hand side