## 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 243

We want to know what the time paths of capital and output will look like given any

possible K(l). We also want to know whether the initial

economy matters much in the long run. The function given in the equation

completely ...

We want to know what the time paths of capital and output will look like given any

possible K(l). We also want to know whether the initial

**capital stock**of aneconomy matters much in the long run. The function given in the equation

completely ...

Page 244

with K(l) units of capital, where K(l) is less than the stationary equilibrium quantity

of capital, K. Using the curve in Figure 9.3 that represents Equation (9.6), we ...

This procedure can be repeated to find the entire sequence of the

with K(l) units of capital, where K(l) is less than the stationary equilibrium quantity

of capital, K. Using the curve in Figure 9.3 that represents Equation (9.6), we ...

This procedure can be repeated to find the entire sequence of the

**capital stock**.Page 253

To see what effects differential savings rates have on the time path of these

economies, we compare the output and

= 1 (which we have been doing so far) and P = 3. In equilibrium the capital, K(t +

1), ...

To see what effects differential savings rates have on the time path of these

economies, we compare the output and

**capital stock**paths for economies with p= 1 (which we have been doing so far) and P = 3. In equilibrium the capital, K(t +

1), ...

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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