## 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 19

Figure 1.5 shows two such straight lines on an

the line from the points marked cl to c*. In this case c3 is strictly preferred to cl. All

of the points on that line are above the

Figure 1.5 shows two such straight lines on an

**indifference curve**graph. Look atthe line from the points marked cl to c*. In this case c3 is strictly preferred to cl. All

of the points on that line are above the

**indifference curve**for c1. Consumption ...Page 24

From that function, it follows that the slope of an

is dfldch,(t). We now want to show that the slope of the

point is the marginal rate of substitution at that point. Take the total derivative ...

From that function, it follows that the slope of an

**indifference curve**at each pointis dfldch,(t). We now want to show that the slope of the

**indifference curve**at anypoint is the marginal rate of substitution at that point. Take the total derivative ...

Page 26

Figure 1.8 is an Edgeworth box with the origin for the

individual h of generation t (solid lines) in the lower left-hand corner and the

origin for the

the ...

Figure 1.8 is an Edgeworth box with the origin for the

**indifference curve**set forindividual h of generation t (solid lines) in the lower left-hand corner and the

origin for the

**indifference curve**set for individual h' of generation t (dotted lines) inthe ...

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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