## 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 57

The budget constraint of the young is now c*(0 < o>*(<) - '*(0 - eh(t), and the

budget constraint when old is now c)(t + 1) ...

identical to the one we used in Chapter 2 (Equation 2.3) except that after-tax

endowments ...

The budget constraint of the young is now c*(0 < o>*(<) - '*(0 - eh(t), and the

budget constraint when old is now c)(t + 1) ...

**lifetime budget constraint**isidentical to the one we used in Chapter 2 (Equation 2.3) except that after-tax

endowments ...

Page 67

Each additional bond purchased by borrowing adds llp(t) — r(t) > 0 to the

endowment side of the

borrow an infinite amount in the private market for borrowing and to purchase an

infinite ...

Each additional bond purchased by borrowing adds llp(t) — r(t) > 0 to the

endowment side of the

**lifetime budget constraint**. Each individual desires toborrow an infinite amount in the private market for borrowing and to purchase an

infinite ...

Page 234

Given wages and supplies of labor, the present value of lifetime con sumption is

maximized by making as large as ... If rental^ + 1) < r(t), then the portion of the

present ...

Given wages and supplies of labor, the present value of lifetime con sumption is

maximized by making as large as ... If rental^ + 1) < r(t), then the portion of the

**lifetime budget constraint**in square brackets is positive, and maximizing thepresent ...

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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