What are the limitations of current models in explaining certain observed behaviors?

The intertemporal budget constraint for an infinite-horizon representative agent can be written as. ◜≡H◞t◟-◝ ℙt (C ) = Bt + ℙt. (1). where Bt is the ... Sep 14, 2020 ... That theory is built around the “intertemporal budget constraint,” which essentially states that in the long run, and in present values, the ... Indeed, given the accounting equation (9.6), the consumption plan of the household will satisfy the intertemporal budget constraint (9.20) if and only if it ... ▷ Inflation as a tax. ▷ Seigniorage. ▷ Intertemporal budget constraint. ▷ Intertemporal discount. ▷ Public Deficit/surplus. 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 ... Jun 22, 2024 ... This paper extends previous tests of intertemporal budget balance and present value relationships by expanding the set of allowable deficit processes. May 3, 2011 ... Because of the government's intertemporal budget constraint, Gt will have to be compensated by taxes, either now or in the future, and the ... representative consumer has an intertemporal budget constraint where money can be borrowed or saved. – There is a time consistent solution that gives ... 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 ... • Intertemporal budget constraint. – implications of rolling over the period-by-period constraint. • Deficits and debt sustainability. – how much government ...