## 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 42

Solving for c*(/), we have the demand function for

/) = xfWO. (0. o>f« + l)) o>*(0 w*(< + 1) = — — + — -, (2.6) 1 + p r(<)(l + P) and as

mentioned above,

Solving for c*(/), we have the demand function for

**consumption when young**of c*(/) = xfWO. (0. o>f« + l)) o>*(0 w*(< + 1) = — — + — -, (2.6) 1 + p r(<)(l + P) and as

mentioned above,

**consumption when young**is a function of the gross interest ...Page 109

Another is that at each gross interest rate, the bequest to the

the larger endowments when

larger endowment when

Another is that at each gross interest rate, the bequest to the

**young**people withthe larger endowments when

**young**(the ... At both higher interest rates and withlarger endowment when

**young**, a member of generation 1 will plan to**consume**...Page 122

The budget constraint for

is equal to endowment when young minus the private loan made and minus the

price paid for each A-period bond times the number of those bonds bought.

The budget constraint for

**consumption when young**is**Consumption when young**is equal to endowment when young minus the private loan made and minus the

price paid for each A-period bond times the number of those bonds bought.

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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