Reviews the basic micro‐foundations of intertemporal choice under uncertainty, and considers the implications for the macroeconomic aggregates of consumption and savings. It also reviews the practical implications of different utility specifications. It is also shown how to derive the fundamental result that consumption follows a martingale. The chapter concludes by reviewing the relationship between the microeconomic theory and models that work with a representative agent model.
Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.