## 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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Results 1-3 of 26

Page 48

equilibrium, then {r(t)} satisfies S,(r(t)) = 0 (2.9) for every t. Notice the logical

direction of

equilibrium ...

**Proposition**2.1 If the quantities and the sequence {r(t)} are a competitiveequilibrium, then {r(t)} satisfies S,(r(t)) = 0 (2.9) for every t. Notice the logical

direction of

**Proposition**2.1. It says that the sequence of gross interest rates in anequilibrium ...

Page 296

The following two

path of exchange rates must be in a perfect foresight, laissez- faire world:

exchange rates must be constant over time. Because we do not observe constant

...

The following two

**propositions**are very strong. The first tells us what the timepath of exchange rates must be in a perfect foresight, laissez- faire world:

exchange rates must be constant over time. Because we do not observe constant

...

Page 301

SA(r) + SB(r)] = gA + gB, and SA(r) + SB(r) > 0, then, for any constant exchange

rate, 0 < E < °°, there exists an equilibrium with time paths of the rates of growth of

...

**Proposition**1 1.3 Given gA > 0 and gB > 0, if there exists anr>0, such that (1 - r)[SA(r) + SB(r)] = gA + gB, and SA(r) + SB(r) > 0, then, for any constant exchange

rate, 0 < E < °°, there exists an equilibrium with time paths of the rates of growth of

...

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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 Proposition purchase quantity rate of growth 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