Corpus ID: 197544819

Behavioural Macroeconomic Policy: New perspectives on time inconsistency

  title={Behavioural Macroeconomic Policy: New perspectives on time inconsistency},
  author={Michelle Baddeley},
  journal={arXiv: Theoretical Economics},
  • M. Baddeley
  • Published 2019
  • Economics
  • arXiv: Theoretical Economics
This paper brings together divergent approaches to time inconsistency from macroeconomic policy and behavioural economics. Behavioural discount functions from behavioural microeconomics are embedded into a game-theoretic analysis of temptation versus enforcement to construct an encompassing model, nesting combinations of time consistent and time inconsistent preferences. The analysis presented in this paper shows that, with hyperbolic/quasihyperbolic discounting, the enforceable range of… Expand


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