Explain the concept of the discount factor and its relationship to the discount rate.

▷ Inflation as a tax. ▷ Seigniorage. ▷ Intertemporal budget constraint. ▷ Intertemporal discount. ▷ Public Deficit/surplus. ... intertemporal budget constraint. It is argued that unit root or cointegration tests have low power in rejection unit root from near unit root alternatives ... • 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:. The consumer's intertemporal budget constraint is c1 + c2. 1 + r. = y1 + y2. 1 + r. Method One:Find MRS and Substitute. Differentiate the Utility function. dU ... • Intertemporal decisions. • Fisher's two period model. Page 37. 38. The intertemporal budget constraint – a two-period framework. Period 1: S = Y1 - C1. Period ... Oct 3, 2021 ... Imagine that income in the current period falls (moves to E'). All else being equal, use the line tool to draw the new intertemporal budget constraint. It does not address budget constraints: an impulse to demand from government spending comes out of thin air, rather than being offset by taxation or a cut. 1 ... It establishes the link which exists between the prevailing level of government indebtedness and the future debt servicing requirements. Nov 26, 2024 ... The government intertemporal budget constraint is a stock-flow relationship determing the debt dynamics. Consider the general case in which ... The level of consumption will be determined by the intertemporal budget constraint (7). • The population growth rate n does not enter into these expressions.