Questions tagged [intertemporal-choice]
The intertemporal-choice tag has no usage guidance.
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Intertemporal consumption with heterogeneous/multiple goods
I'm currently trying to build a CGE, and I'm stuck at the household's problem which is about intertemporal utility maximisation. The household consumes multiple heterogeneous goods $C_i$ (I'm limiting ...
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Intertemporal Utility Optimization For Multiple Goods
I'm building an economic simulation game and I'm trying to solve for the values that a person will spend on each good and the amount they will save in the current period, taking into account all ...
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What is the household i’s intertemporal budget constraint (utility depends on household consumption and neighbourhood's average consumption)?
Assume that household i derives utility from consumption, but now lifetime utility is given by the following expression:
$$ U_i = \sum_{t=0}^{\infty} e^{ -\rho t}\frac{1}{1-\theta} \left(\frac{C_{i,t}}...
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Can euler equations and intratemporal optimality conditions ever bind one another?
The Euler equation is an a solution concept in most macroeconomic models which determine the optimal path to be taken in a consumption sequence. In a case where we have multiple consumption goods (say ...
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How does intertemporal substitution affect the equivalence between cap-and-trade and carbon taxes?
It is often stated that, with perfect information and neglecting administrative burdens, the following two policies are economically equivalent:
a carbon tax of $T$ that results in a equilibrium ...
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Optimal consumption for infinite number of periods and exogenous income
I have the following optimization problem:
$\max_{\{c_t, s_{t+1}\}} \Pi_{t=0}^\infty c_t^{\beta^t}$
$\text{subject to } \space c_t + s_{t+1} = y_t + (1 + r) s_t \text{ and } s_0 = 0$
How do I find ...
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How is the intertemporal budget constraint derived from all intratemporal constraints
Suppose an agent receives a fixed (exogenous) income every period, $y_t$, and can either spend it on $c_t$ or save it/borrow ($s_{t+1}$). Suppose also that the agent starts off with no savings or debt....
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Deriving optimality conditions in the New Keynesian model framework with an undefined consumption function
I am trying to solve the household's optimization problem in the New Keynesian model framework, where utility is given by
$$
E_0\sum_{t=0}^\infty \beta^t \mathcal{U}(C_t,L_t,N_t;Z_t)
$$
and period ...
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Perfectly functioning credit markets and consumer saving
Today in my Macroeconomics lecture, while covering the Real Intertemporal Model with Investment (Chapter 11 of Williamson's Macroeconomics), my professor proponed that a key assumption to not make ...
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Meaning of «intertemporal substitution effect dominates the income effect»
Assume a household intertemporal optimisation problem, where they only either consume or labour, and one of the equilibrium conditions states that labour will be a positive function of productivity, ...
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Metzler diagram interpretation
Suppose we have a graph whose axes are r (interest rate) and S/I/Y/whatever. I'm studying intertemporal models right now, and i got a bit confused.
According to my textbook, the area underneath S is ...
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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 = $ ...
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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 ...
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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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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 ...
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