intertemporal choice

What Is Intertemporal Substitution Effect? Elasticity of intertemporal substitution (or intertemporal elasticity of substitution, EIS) is a measure of responsiveness of the growth rate of consumption to the real interest rate. … The net effect on current consumption is the elasticity of intertemporal substitution. What is intertemporal substitution hypothesis? The intertemporal-substitution hypothesis attributes cyclical movements