An Austrian Trade Cycle model with an Endogenous Value of Time

François Gardes (1, 2, 3, 4)

1 CES - Centre d'économie de la Sorbonne
2 UP1 - Université Paris 1 Panthéon-Sorbonne
3 PSE - Paris School of Economics
4 EGEI - Éthique et Gouvernance de l’Entreprise et des Institutions

The article proposes an explicit modelization of households behavior by describing the possible relationship between the inter-temporal substitution rate and the opportunity cost of time which could afford the missing link between consumers' choices and macro variables in an Austrian trade cycle tradition. The changes of the value of time during expansions and recessions involve direct and indirect changes of households' demand and saving which create shadow prices. The variations of shadow costs are related to the competitivity of markets restoring equilibria by means of associated changes in monetary prices.

Mots clés: Inter-temporal substitution rate; originary interest; psychological interest rate; psychological time; opportunity cost of time; austrian trade cycle

Domaines: Economies et finances; Méthodes et statistiques

François Gardes. An Austrian Trade Cycle model with an Endogenous Value of Time. 2021. ⟨halshs-03325379⟩