Dissave

The ith consumer's choice set is depicted in Figure 3.3 as a single point. It is not possible for the consumer to exploit gains from trade between dates (by saving/dissaving) within the constraints imposed by the spot market economy.

In chapter 21, we shall follow Cole and Kocherlakota (2001) by allowing the household to save (but not to dissave) a risk-free asset that bears fixed gross interest rate R#61;#92;beta#123;-1#125;. [emphasis in original]

In [the Diamond overlapping-generations model], each individual saves early in life and dissaves later in life. As a result, at any time some individuals have saved and not yet dissaved.