How do macroeconomic shocks affect household and firm intertemporal budget constraints?

The basic idea of intertemporal choice of consumption is to understand how the consumer interacts with the capital market. II. INTERTEMPORAL BUDGET CONSTRAINT. (A similar distinction-primary versus total-applies to the budget surplus and the budget balance.) The Intertemporal Budget Constraint. Budget constraints play ... 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 ... Bt ≥ −. ¯. B or Ct ≤ Wt. Intertemporal budget constraints. • Relate the borrowing constraint to ability to pay. • A complete-markets notion. • Firm: market ... The theoretical model of the intertemporal budget constraint suggests that when the rate of return rises, the quantity of saving may rise, fall, or remain the ... The government's intertemporal budget constraint requires that the present value of current and future taxes must be sufficient to cover the present value of ... intertemporal government constraint will be fulfilled because the intertemporal budget constraint requires the discounted debt to converge to zero.7. One ... The intertemporal budget constraint proves to be satisfied if either the debt series or the revenue and with-interest spending series are integrated of ... how is the deficit financed? • bond sales to the private sector or the central bank (money creation). • government inter-temporal ... The intertemporal budget constraint is a concept in behavioral economics that describes the trade-offs individuals face when making consumption and savings ...