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Pastimes : Austrian Economics, a lens on everyday reality
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To: gpowell who wrote (282)11/13/2003 2:24:07 PM
From: Don Lloyd  Read Replies (1) of 445
 
gpowell,

...It is observed that constraints have tended to ease with time, therefore any delay in immediate consumption is consistent with utility maximizing behavior.

But it is only an observation, and the justification for savings is elsewhere.

Specific present consumption is always preferred to future consumption by an individual's rate of time preference. However, this is over-ridden by the present unease that would result from a failure to provide for the amelioration of future unease or to provide for future satisfaction. These provisions are accomplished by holding both money and other exchange-valued goods that, in the future, can be exchanged for consumption goods.

Regards, Don
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