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Here, is the rate of time preference, or the discount rate. It is the sum of the pure rate of time preference and the growth rate of per capita consumption (), adjusted by the factor (), which represents the impact of economic growth on the discount rate.
The present value of $1,000, 100 years into the future. Curves represent constant discount rates of 2%, 3%, 5%, and 7%. The time value of money refers to the fact that there is normally a greater benefit to receiving a sum of money now rather than an identical sum later. It may be seen as an implication of the later-developed concept of time ...
In economics, dynamic inconsistency or time inconsistency is a situation in which a decision-maker's preferences change over time in such a way that a preference can become inconsistent at another point in time. This can be thought of as there being many different "selves" within decision makers, with each "self" representing the decision-maker ...
His 1930 treatise, The Theory of Interest, summed up a lifetime's research into capital, capital budgeting, credit markets, and the factors (including inflation) that determine interest rates. Fisher saw that subjective economic value is not only a function of the amount of goods and services owned or exchanged, but also of the moment in time ...
In economics, intertemporal choice is the study of the relative value people assign to two or more payoffs at different points in time. This relationship is usually simplified to today and some future date. Intertemporal choice was introduced by Canadian economist John Rae in 1834 in the "Sociological
Capital and Interest (German: Kapital und Kapitalzins) is a three-volume work on finance published by Austrian economist Eugen Böhm von Bawerk (1851–1914). The first two volumes were published in the 1880s when he was teaching at the University of Innsbruck .
The Theory of Interest Rates. Macmillan. Reprinted in Clower, 1987, pp. 34-58. 1966. Growth without Development: An Economic Survey of Liberia, with George Dalton, Mitchell Harwitz, and Alan A. Walters. Review extracts 1 and 2. 1967. "A Reconsideration of the Microfoundations of Monetary Theory," Western Economic Journal, 6(1), pp. 1-8 (press ...
Economic theories of intertemporal consumption seek to explain people's preferences in relation to consumption and saving over the course of their lives. The earliest work on the subject was by Irving Fisher and Roy Harrod, who described 'hump saving', hypothesizing that savings would be highest in the middle years of a person's life as they saved for retirement.