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Intertemporal equilibrium
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{{Unreferenced|date=December 2009}} '''Intertemporal equilibrium''' is a notion of [[economic equilibrium]] conceived over many periods of [[time]]. In modern economic [[theory]], most models explicitly take into account the fact that the economy evolves over time, and that its equilibrium cannot be fruitfully analyzed from a purely static perspective. Therefore the [[general equilibrium]] of the economy is conceived as an intertemporal equilibrium, meaning that [[household]]s and [[Business|firms]] are assumed to make intertemporal decisions. That is, households are assumed to choose consumption and labor on the basis of [[wage]]s, [[price]]s, [[utility]], and [[wealth]] over their whole lifetimes, instead of considering these quantities at just one point in time. Likewise, firms are assumed to choose hiring, investment, and output on the basis of [[productivity]] and [[demand]] over the foreseeable future, instead of considering these quantities at just one point in time. The intertemporal general equilibrium is then analyzed as the [[Nash equilibrium]] or [[competitive equilibrium]] of the intertemporal [[Strategy (game theory)|strategies]] of all the households and firms (and any other economic agents under consideration, such as governments).
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