What is the meaning of intertemporal?
Filters. Describing any relationship between past, present and future events or conditions. adjective. 5.
What are the examples of intertemporal decision making?
Most choices require decision-makers to trade-off costs and benefits at different points in time. Decisions with consequences in multiple time periods are referred to as intertemporal choices. Decisions about savings, work effort, education, nutrition, exercise, and health care are all intertemporal choices.
What is an intertemporal model?
Investment is essentially passive: the “one good” assumption leads to a perfectly elastic investment supply; the absence of installation costs for investment leads to a perfectly elastic investment demand. …
Who invented intertemporal choice?
Irving Fisher developed a model to analyse how rational, forward-looking consumers make consumption choices over a period of time. (3) how these two conjointly determine households’ decision regarding optimal consumption and saving over an extended period of time.
What is intertemporal trade off?
Introduction. Intertemporal trade-off is one of the key concepts in asset pricing and macroeconomics. The trade-off is described by the elasticity of intertemporal substitution (EIS) defined as the change in expected consumption growth in response to a change in the real interest rate.
What is the doctrine of intertemporal law?
Intertemporal law (tempus regit actum) is a concept in the field of legal theory. Intertemporal law can be more broadly defined as the branch of law which governs the usage of treaties, codifications and legal acts to the cases that occurred before their creation or entry into force.
What are intertemporal trade offs?
What is the economic interpretation of the intertemporal budget constraint?
In words, the intertemporal budget constraint (“intertemporal” = “across time”) says that the present discounted value of consumption expenditures must equal the present discounted value of income.
What is intertemporal trade?
In the intertemporal trade model, you have two countries in two time periods. One country may simply have consumers who prefer current consumption over future consumption, and so are unwilling to save as much as another country.
What is the two period intertemporal choice model?
The Model: The consumer lives for two periods, and then dies. So there is no point saving in the second period of time. Rearranging, savings are whatever we don’t consumer: our current disposable income minus our current consumption.
Why is consumption smooth?
Abstract. For thirty years it has been accepted that consumption is smooth because permanent income is smoother than measured income. The paper argues that in postwar U.S. quarterly data, consumption is smooth because it responds with a lag to changes in income.
What do you mean by intertemporal substitution?
Intertemporal Substitution. Intertemporal substitution is the decision to forego current consumption in order to consume in the future. The most common example is saving for retirement.