What does intertemporal budget constraint mean?
Definitions for intertemporal budget constraint
in·tertem·po·ral bud·get con·straint
This dictionary definitions page includes all the possible meanings, example usage and translations of the word intertemporal budget constraint.
Wikipedia
Intertemporal budget constraint
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. In its general form it 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 ∑ t = 0 T x t ( 1 + r ) t ≤ ∑ t = 0 T w t ( 1 + r ) t , {\displaystyle \sum _{t=0}^{T}{\frac {x_{t}}{(1+r)^{t}}}\leq \sum _{t=0}^{T}{\frac {w_{t}}{(1+r)^{t}}},} where x t {\displaystyle x_{t}} is expenditure at time t, w t {\displaystyle w_{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 1 1 + r {\displaystyle {\frac {1}{1+r}}} 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.
Numerology
Chaldean Numerology
The numerical value of intertemporal budget constraint in Chaldean Numerology is: 2
Pythagorean Numerology
The numerical value of intertemporal budget constraint in Pythagorean Numerology is: 7
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"intertemporal budget constraint." Definitions.net. STANDS4 LLC, 2024. Web. 27 Apr. 2024. <https://www.definitions.net/definition/intertemporal+budget+constraint>.
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