Explain the concept of present value in the context of intertemporal choice.

Mar 5, 2021 ... This budget constraint equation represents an individual planning her consumption over two periods (before retirement o, after retirement 1). Bt+1 = (1 + r) Bt + Gt. Tt. (1) where B is the stock of bonds issued by the government (that is B is the stock of real debt - which is an asset in the hand ... The budget set and the budget line (09.03.2016); Optimal Choice. Tangency ... Intertemporal budget constraint. Effect of change in the interest rate on ... ... Intertemporal Budget Constraint (GIBC). Now let's suppose that the only kind of expenditures the government engages in are transfers, so that Xt simply ... If, for example, the current stock of debt is zero, then the intertemporal budget constraint says that the discounted present value of future primary surpluses ... • Sequential budget constraint for all t ∈ T: ct + st ≤ et + Rtst−1. (1) where s−1 ≡ ¯s−1. • Incomes, returns, and initial capital determine budget set:. "Are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint?," Journal of Monetary Economics, Elsevier, vol. 54(7) ... Nov 24, 2024 ... My hot take is that this isn't a trivial intertemporal budget constraint. It's an optimal stopping problem: cakes have evolving texture and ... 2. Consumer's choices are subject to an intertemporal budget constraint-a measure of the total resources available for present and future consumption. Given the ... The level of consumption will be determined by the intertemporal budget constraint (7). • The population growth rate n does not enter into these expressions.