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In economics and finance, an intertemporal budget constraint is a constraint faced by a decision maker who is making choices for both the present and the future. The term intertemporal is used to describe any relationship between past, present and future events or conditions. In its general form, the intertemporal budget constraint says that the present value of current and future cash outflows cannot exceed the present value of currently available funds and future cash inflows. Typically this is expressed as
where is expenditure at time t, is the cash that becomes available at time t, T is the most distant relevant time period, 0 is the current time period, and is the discount factor computed from the interest rate r.
Complications are possible in various circumstances. For example, the interest rate for discounting cash receipts might be greater than the interest rate for discounting expenditures, because future inflows may be borrowed against while currently available funds may be invested temporarily pending use for future expenditures, and borrowing rates may exceed investment returns.
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government income, and by reminding the public of the government's intertemporalbudgetconstraint. The public will then, in theory, react to this information...
competitive consumers optimize homothetic utility functions subject to a budgetconstraint, the ratios of goods demanded by consumers will depend only on relative...
sales tax. Like budget incidence, differential incidence can be studied in a closed model in which the government budgetconstraint is always satisfied...
and for understanding business cycle fluctuations. It also controls intertemporal substitution responses to fluctuations of wage. Moreover, it determines...
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Deaton), Journal of Political Economy 106(5): 897–930, October 1998. "Intertemporal Choice and Inequality" (with Angus Deaton), Journal of Political Economy...
version of the paper was published in 1982 under the title "A test of the intertemporal asset pricing model". The authors found that a standard general equilibrium...
theory is most appropriately set forth in terms of microeconomics and intertemporal general equilibrium models. The critics, such as Pierangelo Garegnani...
of interest consistent with intertemporal equilibrium also implies a constant price level. Hayek posited that intertemporal equilibrium requires not a...
Pdf. Alogoskoufis, George S. (June 1987). "Aggregate employment and intertemporal substitution in the UK". The Economic Journal. 97 (386): 403–415. doi:10...
The budget set is bounded above by the budget line. Graphically speaking, all the consumption bundles that lie inside and on the budgetconstraint form...
Journal of Political Economy (1953): 461-488. in JSTOR Michael Gavin, "Intertemporal dimensions of international economic adjustment: evidence from the Franco-Prussian...
Academy of Engineering, National Academy Press, 1991. "International and Intertemporal Comparison of Productive Efficiency: An Application of the Meta-Production...
MacMillan, London, 1991. • "Regular demand with several, general budgetconstraints" (with Y. Balasko). Equilibrium and Dynamics: Essays in Honor of David...
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