## 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 99

For this

change in taxes and transfers.1 Figures 4.1 through 4.4 illustrate the general

method of finding a solution for this situation. This equilibrium can be found

directly ...

For this

**result**to hold, there must be positive bequests both before and after thechange in taxes and transfers.1 Figures 4.1 through 4.4 illustrate the general

method of finding a solution for this situation. This equilibrium can be found

directly ...

Page 117

Reprise The

next generation matters to each member of the current generation, then there is

an optimal amount of bequests that will be made from the current old to the young

.

Reprise The

**results**of this chapter show us that, if the utility of a member of thenext generation matters to each member of the current generation, then there is

an optimal amount of bequests that will be made from the current old to the young

.

Page 141

Recall the

with one-period government borrowing has a corresponding equilibrium with

balanced budget taxes and transfers at every date and the same consumption ...

Recall the

**result**at the end of Chapter 3 in which we showed that any equilibriumwith one-period government borrowing has a corresponding equilibrium with

balanced budget taxes and transfers at every date and the same consumption ...

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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