In this chapter, we modeled growth in an economy by a growing population. We could also achieve a growing economy by having an endowment that increases over time. To see this, consider the following economy: Let the number of young people born in each period be constant at N. There is a constant stock of fiat money, M. Each young person born in period t is endowed with yt units of the consumption good when young and nothing when old. The individual endowment grows over time so that yt = αyt−1 where α > 1. For simplicity, assume that in each period t, individuals desire to hold real money balances equal to one-half of their endowment, so that vtmt =yt/2