A Quick Review to Intertemporal Maximization Problems
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چکیده
1 A simple two period model 1.1 The intertemporal problem The intertemporal consumption decision can be analyzed in a way very similar to an atemporal problem. The consumer has to choose between consumption of the same good at different dates. He lives for two periods and derives utility from his stream of consumption, as given by u (c0, c1). The consumer takes the gross real interest rate R as given. His budget at time 0 is given by y (expressed in terms of period 0 goods). Assume that the only source of income in period 1 is the income from savings at time 0.
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