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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (283)	11/13/2003 3:21:31 PM
From: gpowell	Read Replies (1) \| Respond to of 445

Specific present consumption is always preferred to future consumption by an individual's rate of time preference. Correct, and a good point. In comparing intertemporal comsumption of perfect substitutes of normal goods, present consumption is preferred. And, while in the long run financial capital can be viewed as delayed consumption, it is incorrect to think of the current and future consumables as perfect substitutes. I think it is essential to view financial capital as having utility due to their future use in an expanded constrained choice set, beyond its benefit as a hedge against future negative shocks.