How do borrowing constraints affect the response to income shocks?

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 ... to an intertemporal budget constraint. Whatever solution approach one employs — the calculus of variations, optimal control theory or dynamic programming ... The intertemporal budget constraint? Below are 3 quotes from our book. The slope of the budget constraint is determined by the relative price of the two goods, ... 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 ... Aug 31, 2020 ... In its standard form, the intertemporal budget constraint requires the present value of a government's future primary cash surpluses to be ... Oct 26, 2017 ... the government's present value budget constraint (PVBC) holds. • the credit market clears: Sp = B. That is, private savings = quantity of debt ... Apr 30, 2020 ... ... budget line gives total utility at each point on the budget line. The ... intertemporal budget constraint? How would it affect one's ... This is called the intertemporal budget constraint. The present value sum of ... How to derive the intertemporal budget constraint. 3. Conditions for ... representative consumer has an intertemporal budget constraint where money can be borrowed or saved. – There is a time consistent solution that gives ... intertemporal government constraint will be fulfilled because the intertemporal budget constraint requires the discounted debt to converge to zero.7. One ...