Time Dependent Preferences in Macroeconomics∗
نویسندگان
چکیده
This paper deals with hyperbolic discounting in a macro context. Time consistency is discussed in terms of rational behavior and rational expectations. The theory is applied to the intertemporal consumption decision in order to explain undersaving in an economy. Moreover, possible implications on policy makers’ decisions on reforms and budget deficits are evinced. Finally, the Ricardian equivalence theorem is shown to heavily rely on the assumption of time consistent choice. Journal of Economic Literature Classification Numbers: A12, B41, E21, E61, E62, H31, H62.
منابع مشابه
Does Macroeconomics Need Microeconomic Foundations?
I argue that it is microeconomics that needs foundations, not macroeconomics. Preferences need to be built on biology, and, in particular, on neuroscience. In contrast, macroeconomics could benefit from rationalizations of aggregate economic phenomena by non-equilibrium statistical physics. Special issue Reconstructing Macroeconomics JEL: B22, B41, C82, D87
متن کاملDynamic variational preferences
We introduce and axiomatize dynamic variational preferences, the dynamic version of the variational preferences we axiomatized in [21], which generalize the multiple priors preferences of Gilboa and Schmeidler [9], and include the Multiplier Preferences inspired by robust control and first used in macroeconomics by Hansen and Sargent (see [11]), as well as the classic Mean Variance Preferences ...
متن کاملThe Long Range Dependence Paradigm for Macroeconomics and Finance
The long range dependence paradigm appears to be a suitable description of the data generating process for many observed economic time series. This is mainly due to the fact that it naturally characterizes time series displaying a high degree of persistence, in the form of a long lasting e ect of unanticipated shocks, yet exhibiting mean reversion. Whereas linear long range dependent time serie...
متن کاملAsset Pricing with Heterogeneous Preferences
Finding a stochastic discount factor that is robust to model misspecification is not trivial. I consider a general equilibrium model with many agents who can invest their wealth in many assets. As long as (i) agents have (individual-, time-, and state-dependent) recursive preferences that are homothetic in current consumption and continuation value with a common relative risk aversion coefficie...
متن کاملA social recommender system based on matrix factorization considering dynamics of user preferences
With the expansion of social networks, the use of recommender systems in these networks has attracted considerable attention. Recommender systems have become an important tool for alleviating the information that overload problem of users by providing personalized recommendations to a user who might like based on past preferences or observed behavior about one or various items. In these systems...
متن کامل