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Optimal Consumption and Investment in Two-Period Model

Explore the impact of the social discount rate, market interest rate, taxes, and government borrowing on savings and investment decisions in a two-period model. Understand the equality of MRTP and the market interest rate and the optimal levels of consumption and investment with and without growth.

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Optimal Consumption and Investment in Two-Period Model

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  1. Ten The Social Discount Rate

  2. Figure 10-1Equality of MRTP and the Market Interest Rate

  3. Figure 10-2The Optimal Levels of Consumption and Investment in a Two-Period Model

  4. Figure 10-3Optimal Levels of Consumption and Investment in a Two-Period Model without Growth

  5. Figure 10-4The Effects of Taxes and Government Borrowing on Savings and Investment

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