Financial Inclusion in Papua New Guinea

Intertemporal Trade: optimal allocation of consumption over time HH optimization problem Maxε₁₂ In V (p, E₁) + ß In VΣ (p, E₂) subject to W ⚫ Solution: Euler equation: E2 = ẞ (1+r) E1 • ẞ (1+r) >1 HH savings in period 1⇒ E₁ < E2 = E2 E₁ + 1+r ⚫ HH reduces consumption on all goods, reallocates labor from home-produced goods to production outside of HH, and saves more. 2++) (1+0) UFI (E1, E2) = (1+B) In LIn (1 + f) + In ( 2+r+f 2+r+f +ẞIn - (1+B) In a (j) dj (1+f) (2+p) Davies & Nettuno (1+B) (12) In a² (1+ d) ADY 590 Financial Inclusion in Papua New Guinea August 4, 2022 20/36

View entire presentation