Infinitely lived representative agent exchange economy with myopia∗

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. ∗This paper is part of a joint research with Heracles Polemarchakis. I would like thank Heracles Polemarchakis for vaulable advice and Claude d’Aspremont, Gaetano Bloise, Fabrizio Germano and Matteo Salto for useful comments. †IDEI, Université de Sciences Sociales de Toulouse and CORE, Université Catholique de Louvain; E-mail: [email protected]