Questions tagged [intertemporal-choice]

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In an intertemporal (2-period) consumption model, why is the investment rate independent of discount factor?

In lecture, my professor defined the following 2-period consumption model: $c_i = $ consumption in period $i$. $y =$ endowed income in period 1. $r = $ interest rate in perfect credit markets. $h = $ ...
4
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1answer
40 views

Proof that stochastic discount factor is positive in complete markets

I am looking for a reference (with a proof possibly) to understand why the completeness of markets implies that the stochastic discount factor is strictly positive in the context of intertemporal ...
0
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1answer
32 views

Why does Ricardian Equivalence not hold when there are different borrowing and lending rates on the market?

If you can propose any explanation (intuitive, graphical or algebraic), I will appreciate it
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0answers
20 views

Intertemporal Slutsky and Endowment

To make sure I'm understanding Slutsky's equation and intertemporal choice correctly: given a choice between consumption today and consumption in the future, an increase in the interest rate will ...
1
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1answer
72 views

How do we define an efficient tax in microeconomics?

I am currently working through problems to study for an upcoming exam. I am not seeking a solution per se. I am looking at the intertemporal choice model. I am looking at two periods where consumption ...