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that vary over time) with present bias (greater discounting when outcomes are delayed specifically from the present, as … is explained by a novel cross-period discounting framework: Consumers are more impatient when choosing between options … of time discounting, and that sensitivity to subjective financial periods both predicts and causes specific inconsistency …
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This paper studies the design of optimal time-consistent monetary policy in an economy where the planner trusts its own model, while a representative household uses a set of alternative probability distributions governing the evolution of the exogenous state of the economy. In such environments,...
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