Discuss the welfare consequences of borrowing constraints.

Keywords: current account deficits, sustainability, intertemporal budget constraint ... sustainability of the intertemporal budget constraint: – when there is no ... Dec 30, 1991 ... ... intertemporal budget constraints, but nevertheless satisfy the nation's budget constraint. In most cases this has occurred because changes ... • Intertemporal decisions. • Fisher's two period model. Page 37. 38. The intertemporal budget constraint – a two-period framework. Period 1: S = Y1 - C1. Period ... Nov 6, 2016 ... Share your videos with friends, family, and the world. May 3, 2011 ... Because of the government's intertemporal budget constraint, Gt will have to be compensated by taxes, either now or in the future, and the ... +. +. +. , and so on – are discount factors. 116. We will refer to this last expression as the intertemporal government budget constraint, which is an infinite- ... intertemporal budget constraint proceeds as in the proof of Proposition 1. Moreover, we can again show that the hypothesized plan for each unit satisfies ... ... Intertemporal Budget Constraint (GIBC). Now let's suppose that the only kind of expenditures the government engages in are transfers, so that Xt simply ... ... intertemporal budget constraint of the consolidated government sector (central bank and governments). This is the consequence of the constraint being a ... to an inter-temporal budget constraint, stock of assets, and limits on borrowing. If, at an instant of time, returns to capital are relatively high, the ...