Financial Inclusion in Papua New Guinea
Theoretical Framework
●In maximizing household utility household's make two decisions:
① efficient allocation of household resources within a time period
(comparative advantage)
★ produce goods self (autarky) or trade with economy (sell services of fop
and buy goods)
optimal allocation of expenditure across time
▸ involves a bargain within HH
⚫ NFI household: no intertemporal trade.
⚫HH's problem
▸ i. intratemporal: allocate resources across range of productive activities
(within and outside HH)
★ choose between home production of some goods, trading for others by
selling services of home factors of production
▸ ii. intertemporal: allocate consumption across time
★ borrow/lend
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Davies & Nettuno
Financial Inclusion in Papua New Guinea
August 4, 2022
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