patrick~ macro 2011 fall

[Doosoo Kim]

Patrick,

In 2011 macro fall Q3,

I remember you mentioned about transversality condition to show that there cannot be a steady state with debt constraint binding every period.

I tried to check TVC but I couldn't show it fails with debt constraint binding.

It's at the top of the attached file.

Can you tell me what I am missing?

Best,

Doosoo