## Introduction to Dynamic Macroeconomic Theory: An Overlapping Generations ApproachEconomies are constantly in flux, and economists have long sought reliable means of analysing their dynamic properties. This book aims to provide a succinct and accessible exposition of modern dynamic (or intertemporal) macroeconomics. |

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Page 71

Ricardlan Equivalence The equilibrium in Exercise 3.3a is also an equilibrium in

Exercise 3.3b. This equivalence is a particular instance ... imposes taxes equal to

0. 1 unit of the time 1 good Introducing a Government 71

Ricardlan Equivalence The equilibrium in Exercise 3.3a is also an equilibrium in

Exercise 3.3b. This equivalence is a particular instance ... imposes taxes equal to

0. 1 unit of the time 1 good Introducing a Government 71

**Ricardian Equivalence**.Page 84

If the borrowing and taxing scheme shifts the tax burden to other generations,

then the concept of

other generations does change the consumption pattern and the gross interest

rate ...

If the borrowing and taxing scheme shifts the tax burden to other generations,

then the concept of

**Ricardian equivalence**does not hold. Passing on taxes toother generations does change the consumption pattern and the gross interest

rate ...

Page 117

present value of an individual's tax liability constant results in the same

consumption allocation and the same gross interest rate. If the government sells

bonds at ...

**Ricardian equivalence**tells us that any set of taxes and transfers that keeps thepresent value of an individual's tax liability constant results in the same

consumption allocation and the same gross interest rate. If the government sells

bonds at ...

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### Contents

Describing the Environment | 5 |

Competitive Equilibrium | 32 |

Introducing a Government | 55 |

Copyright | |

10 other sections not shown

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### Common terms and phrases

45-degree line A-period bonds aggregate savings function amount arbitrage assets autarky Bailey curve bequests bliss point borrowing and lending budget line capital stock Chapter chooses competitive equilibrium Consider an economy consumption allocation consumption point consumption when old consumption when young credit controls crop endowment point equal Equation equilib equilibrium condition equilibrium price example economy exchange rate EXERCISE expected price fiat money Figure given gives government bonds government revenues gross interest rate growth rate hold indifference curve individual h inflation labor lifetime budget constraint market clearing maximize member h money creation money supply output Pareto optimal Pareto superior perfect foresight period person h pm(t present value price of land price path price sequence private borrowing production function Proposition purchase quantity rate of return reserve requirement restrictions result Ricardian equivalence seignorage solve stationary equilibrium stationary monetary equilibrium storage sumption tax-transfer scheme taxes and transfers temporary equilibrium tion utility function