Explain how a country can run current account deficits or surpluses to smooth consumption over time.

If the consumer faces an intertemporal budget constraint. C1 + β C2 = constant, where β = 1/(1 + interest rate) is the period-1 equivalent of a dollar in ... Nov 6, 2016 ... Share your videos with friends, family, and the world. Supervision 1: The Intertemporal Budget Constraint. An infinitely-lived consumer faces a series of period budget constraints: Y1 + (1 + r)B0 = C1 + B1,. Y2 + ... combined with the intertemporal budget constraint, determine the optimal allocation of (c1,t,h1,t,c2,t+1,h2,t+1). 1.1.2 Tax on Capital Mimics Age-Dependent ... Indeed, given the accounting equation (9.6), the consumption plan of the household will satisfy the intertemporal budget constraint (9.20) if and only if it ... The intertemporal budget constraint is based on the assumption that income and interest rates are ... A. determined by the consumer. B. determined by the gov't ... (intertemporal and otherwise) budget constraints. Under weak assumptions, we prove this distorts several aspects of their consumption and production plans ... Same as with Labor Supply, maximizing utility in the context of intertemporal choices is IDEN-. TICAL to what we've been doing, just with a different budget ... More recently, several different researchers have devised and implemented tests of the intertemporal budget constraint in a variety of different contexts. Sep 13, 2018 ... price level in line with the intertemporal budget constraint (in real terms). In equilibrium, monetary and fiscal policies jointly ensure ...