How does the interest rate link consumption possibilities across the two periods?

Intertemporal budget constraint (IBC): The measure of the rate at which individuals can trade off consumption in one period for consumption in another period. 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 ... 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 ... Nov 9, 2017 ... Finally, the paper claims that fiscal policies that aim at being consistent with an intertemporal budget constraint are likely to destabilize ... intertemporal government constraint will be fulfilled because the intertemporal budget constraint requires the discounted debt to converge to zero.7. One ... Mar 5, 2021 ... This budget constraint equation represents an individual planning her consumption over two periods (before retirement o, after retirement 1). The intertemporal budget constraint refers to the trade-off between current and future consumption that individuals face, given their current income and future ... The basic idea of intertemporal choice of consumption is to understand how the consumer interacts with the capital market. II. INTERTEMPORAL BUDGET CONSTRAINT. More recently, several different researchers have devised and implemented tests of the intertemporal budget constraint in a variety of different contexts. The level of consumption will be determined by the intertemporal budget constraint (7). • The population growth rate n does not enter into these expressions.