《微观经济学》清华大学课件_10.pdf

Chapter Ten Intertemporal Choice What Are We Doing in this Chapter? We apply our basic framework of consumer choice to study issues of choices across different time periods; Again, in terms of theoretical framework, not much is new! What Are the Questions? Persons often receive income in “lumps”; e.g. monthly salary. How is a lump of income spread over the following month (saving now for consumption later)? Or how is consumption financed by borrowing now against income to be received at the end of the month? Present and Future Values Begin with some simple financial arithmetic. Take just two periods; 1 and 2. Let r denote the interest rate per period. Future Value Given an interest rate r the future value one period from now of $m is FV m(1 r). Present Value Q: How much money would have to be saved now, in the present, to obtain $1 at the start of the next period? A: $m saved now becomes $m(1+r) at the start of next period, so we want the value of m for which m(1+r) = 1 That is, m = 1/(1+r), the present-value of $1 obtained at the start of next period. Present Value The present value of $1 available at the start of the next period is 1 PV . 1 r And the present value of $m available at the start of the next period is m PV . 1 r The Intertemporal Choice Problem Let m1 and m2 be incomes received in periods 1 and 2. Let c1 and c2 be consumptions in per