This paper considers an intertemporal decision problem in which the agent has limited foresight. It offers an interpretation of why people may smoke when they are young - and arguably have a short horizon of foresight and refrain from smoking when they get older - and their foresight is better.

The UK's sustainable growth rate has been much lower than that calculated by the OBR and used by the government to forecast public finances. The lack of growth is important in its own right. However, it is also important as far as the government's 2010 deficit reduction plan is concerned. This...