The Intertemporal budget Constraint So (C1, C2)=(m, m2)is the consumption bundle if the consumer chooses neither to save nor to borrow 00
The Intertemporal Budget Constraint c1 c2 So (c1 , c2 ) = (m1 , m2 ) is the consumption bundle if the consumer chooses neither to save nor to borrow. m2 0 m1 0
The Intertemporal budget Constraint Now suppose that the consumer spends nothing on consumption in period 1; that is, C,=0 and the consumer saves m The interest rate is r What now will be period 2's consumption level?
The Intertemporal Budget Constraint Now suppose that the consumer spends nothing on consumption in period 1; that is, c1 = 0 and the consumer saves s1 = m1 . The interest rate is r. What now will be period 2’s consumption level?
The Intertemporal budget Constraint Period 2 income is m Savings plus interest from period 1 sum to (1+r )m- So total income available in period 2 is m2+(1+r)m1 So period 2 consumption expenditure s
The Intertemporal Budget Constraint Period 2 income is m2 . Savings plus interest from period 1 sum to (1 + r )m1 . So total income available in period 2 is m2 + (1 + r )m1 . So period 2 consumption expenditure is
The Intertemporal budget Constraint Period 2 income is m Savings plus interest from period 1 sum to (1+r )m- So total income available in period 2 is m2+(1+r)m1 So period 2 consumption expenditure s c2=m2+(1+rm1
The Intertemporal Budget Constraint Period 2 income is m2 . Savings plus interest from period 1 sum to (1 + r )m1 . So total income available in period 2 is m2 + (1 + r )m1 . So period 2 consumption expenditure is c2 = m2 + 1+ r m1 ( )
The Intertemporal budget Constraint the future -value of the income m。十 endowment (1+rm1 2 00
The Intertemporal Budget Constraint c1 c2 m2 0 m1 0 m r m 2 1 1 + ( + ) the future-value of the income endowment