Infinitely Lived Representative Agent Exchange Economy with Myopia
Abstract
We consider a family of infinitely long lived representative agent economy where, each period, agents can only decide consumption plan of finite dimension n. It is shown that myopia generates indeterminacy and monetary equilibrium in infinitely lived representative economy. Any invertible dynamics with at most one monetary steady state that is increasing in the quantity of money can represent the set of equilibria of an appropriate myopic economy.