## 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 159

If the expected price of 1 unit of land in time t + 1 in economy 1 were the same as

the expected price of one A — 1 -period bond in time t + 1 in economy 2, then the

current

If the expected price of 1 unit of land in time t + 1 in economy 1 were the same as

the expected price of one A — 1 -period bond in time t + 1 in economy 2, then the

current

**prices of land**and bonds would be the same and the gross interest rate ...Page 160

Notice that, in this example, the current price, p(t), will never be greater than 1

and will asymptotically approach 1 as p'(t + 1) goes to infinity. Because Equation (

6. 1 2) gives the lower bound of the current

, ...

Notice that, in this example, the current price, p(t), will never be greater than 1

and will asymptotically approach 1 as p'(t + 1) goes to infinity. Because Equation (

6. 1 2) gives the lower bound of the current

**price of land**and 1 is the upper bound, ...

Page 260

and, given the restriction that

(t) P(t) ~ P(t) For any constant ... The rate of return on

as necessary to get people to pay some positive

and, given the restriction that

**prices**are nonnegative, p'jt + 1) | d(t + 1) & d(t + 1) p(t) P(t) ~ P(t) For any constant ... The rate of return on

**land**can become as largeas necessary to get people to pay some positive

**price**for**land**at each date t.### What people are saying - Write a review

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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