Substitution Effects in Intertemporal Problems

Davide Dragone and Paolo Vanin

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We consider a broad class of intertemporal economic problems and we characterize the short and long-run response of the demand for a good to a permanent increase in its market price. Depending on the interplay between self-productivity and time discounting, we show that dynamic substitution effects can generate price elasticities of opposite sign in the short and in the long run.

JEL-codes: D11 D91 I00 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (4)

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Journal Article: Substitution Effects in Intertemporal Problems (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1147

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