Fourth Edition

Chapter 11

1. Page 376, second column.

On page 376 in the second column a few lines under equation 11.8 the text reads: “Given the assumption of diminishing marginal utility, d < r implies that the left-hand side of equation 11.8 is negative.”

The symbol has been incorrectly switched, the sign SHOULD BE reversed, and so should read as larger than .

(Then the text will match the earlier assertion in the two period model.)

(Thanks to Maarten Punt, Technical University of Munich, for pointing this out to me.)

2. Page 395, Equation 11.30

The d subscripts in this equation, and in the line immediately below, are not needed as in this context, the variables are "undiscounted". (Note that on p. 393 the "d" subscript is introduced as meaning a discounted stream).
(Thanks to Dr Paul Burke, Australian National University, for pointing this out to me.)