- I am having trouble squaring ABCT with this. Can ABCT be squared with it?
- Does anyone know if anyone has worked with producing ABCT-like dynamics from a growth model where consumers hyperbolically discount? I was thinking of this today. It seems like it would have much the same conclusions as liquidity preference would if applied to a temporal capital strucutre: namely, turning the standard ABCT sequence on its head. The idea is current interest rates are higher than they "should be" for time-consistent preferences - something you only discover in the future (as opposed to ABCT, where you're relying on exogenous monkeying around with the interest rate, and you discover in the future that it was previously too low). First - am I thinking about the implications of hyperbolic discounting for the capital structure correctly. Second - anyone ever worked with this?
It's worth reminding everyone that I am something of an ABCT agnostic - I am NOT anti-ABCT. As presented, it makes decent sense. My concerns mainly revolve around the relative lack of empirical evidence (people like Andrew Young are changing this) and the trouble you run into when you incorporate liquidity preference theory (which - for reasons I've stated here previously - would seem to reverse some of the implications of ABCT grounded solely in the loanable funds model).
Back to macro. Isn't this sad? Even when I'm doing stuff for class it makes me think of ABCT/heterodox stuff/other personal interests.