In an economy with an arbitrary number of consumers and an arbitrary number of commodities, some public and some private, I propose a generalization of Lindahl's equilibrium solution, and prove an existence theorem for it. A particular generalization of the of an exchange equilibrium to an economy with public goods is proposed, and it is shown that a Lindahl equilibrium allocation is also a core allocation.

The problem of specifying asset market equilibrium conditions in a macroeconomic model is studied. Two specifications are proposed: "beginning-of-period" and "end-of-period" formulations in period models. In each case the limit of the model as the time period is shortened is rigorously calculated. It is shown that the two formulations are internally consistent, but consistent with each other only under assumptions of perfect foresight. A brief review of the liquidity preference versus loanable funds literature shows that theorists have used these models without explicitly noting the differences and inconsistencies.

There have been two broad strategic approaches to the study of economic growth. The first, exemplified by Solow's paper (1956), attempts to explain how an enterprise economy will grow, given its technology and the market behavior of its consumers. The second approach, exemplified by Ramsey (1928), attempts to determine an optimal development strategy for a fully planned economy, given its technological constraints. These approaches fail to capture a central policy problem of a modern mixed'" economy in which the government can influence investment and saving, but only indirectly, by manipulating certain basic variables like the deficit and the money supply. Our paper represents an attempt to begin the analysis of this problem.1 The very term "mixed economy" implies that there are two centers of decision making and that the preferences of the consumers and of the government are distinguishable.2 It is not at all clear where the preferences of the government come from, or even whether governments have consistent preferences of the kind we will talk about. But a constant theme of policy literature is that government intervention in the economy is effective and can be judged as good or bad for the economy without direct reference to consumer preferences. This is particularly true of policy prescriptions for economic growth. It seems to us that postulating a social welfare

Duncan K. Foley, Martin F. Hellwig; Asset Management with Trading Uncertainty12, The Review of Economic Studies, Volume 42, Issue 3, 1 July 1975, Pages 327