Decreasing Marginal Impatience in a Monetary Growth Model

Decreasing Marginal Impatience in a Monetary Growth Model

Unlike the standard assumption that the degree of impatience, measured by the rate of time preference, is increasing in wealth, empirical studies support that impatience is marginally decreasing. By introducing decreasing marginal impatience into the neoclassical monetary growth model á la Sidrauski, we show that (i) consistently with empirical results, an increase in the core rate of inflation...

Decreasing and increasing marginal impatience and the terms of trade in an interdependent world economy

Using a two-good, two-country model, we examine macroeconomic adjustment by allowing for decreasing and increasing marginal impatience (DMI and IMI). In the reference case where both countries have IMI, a negative output shock in one country lowers the interest rate and both countries’ welfare levels in steady state, whereas, when either one country has DMI, the negative income shock raises the...

Time-consistent stopping under decreasing impatience

Decreasing impatience and the magnitude effect jointly contradict exponential discounting

The experimental literature on time preference …nds that the manner in which subjects discount money (as opposed to utility) exhibits properties known as Decreasing Impatience and the Magnitude Effect. While these …ndings are often referred to as anomalies for the Exponential Discounting model, several authors have demonstrated that each of these qualitative …ndings can be explained by the curv...

Heterogeneous Impatience in a Continuous-Time Model

In a continuous-time economy with complete markets, we show how the heterogeneity in the individual consumers’ risk attitudes and impatience would affect the representative consumer’s counterparts. Specifically, our formulas tell us how his risk tolerance and impatience will change over time, and how his impatience will be affected by the changes in aggregate consumption levels. Under the assum...