Human consumption capital, time preference and dynamics

We define observable impatience as an individual behavior with decreasing consumption over time. This dissertation analyzes the observable impatience for an individual and for a dynasty of individuals that derives satisfaction only from human consumption capital and invests in it through consumption either to increase the stock or to hinder forgetting. As a consequence, at low levels of human consumption capital an agent moves future into present consumption to secure higher future flows of satisfaction. Intuitively, the agent is not willing to delay consumption.;First, we show that observable impatience arises in an environment where the agent can trade financial and physical assets in a perfect capital market In particular, we establish conditions under which an agent undertakes a decreasing consumption path when the rate of time preference and the rate of interest are set to be zero and prove that the smaller the level of income, of initial wealth and of initial human consumption capital, the greater observable impatience. The model rationalizes the belief that wealth induces patient behavior.;Second, we consider dynasties with and without altruistic linkages. Without altruistic linkages we show that observable impatience may switch to patience if income is sufficiently high. With altruistic linkages the framework accounts for observable impatience and for intergenerational transmission of patience. Parent behaves as if they were impatient but become less impatient in each successive generation. We analyze the consequences for observable impatience in an altruistic dynasty that faces the expectation of having a selfish member A dynasty with this expectation in the near future tends to be more impatient observationally than one that expects it in the distant future.;Third, we show that the framework explains the boom recession cycle of private consumption and the U-shape behavior of the real exchange rate observed in exchange rate-based stabilization programs.