How Inter-Temporal Trade Consumption Affects Standard of Living
Abstract
In economics, the relevance of substitution cannot be overstated. For instance, when there is an increase in the price of a certain good, consumers tend to substitute the affected good with a less expensive substitute good. In macroeconomics, the substitution principle is applied in inter-temporal trade-off analysis, albeit in a temporal context. This text concerns itself with inter-temporal trade off in consumption and how it impacts on living standards.