We present the motion of the valence electron in the field of a closed Li^+ core with a one-electron model potential, and calculate the dynamic multipole polarizabilities of the ground state of lithium at imaginary frequencies through a variation-perturbation approach. They are used to calculate the dispersion coefficients, Cc, C8, and C10 and the retardation coefficients. The dispersion coefficients and retardation coefficients govern the retardation potentials between two lithium atoms. The present numerical results are compared with other calculations.