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November 13, 2012


Tom Addison

"The utility of going on a binge diminishes with age because hangovers become more painful"

I can honestly say that it's the complete opposite with me, although two arguments I'd give in support of the idea that binge drinking becomes less fun as you get older are:

- You have less time for idiots as you get older (at least I do!)

- There are fewer single women within your age range and peer group

Luis Enrique

I'm not sure ... the varieties of good I derive utility from have shifted as I age, but my guess is over all my utility from consumption has increased. When I was younger, I might have enjoyed staying up late and boozing more, but I didn't care about where I lived or so much about what I ate. Now most of my money goes on my living arrangements, housing, homewares, food and travel and these matter to me far more than they did when I was younger.

Simple models with discounting might predict that I'd borrow to raise my consumption when young - ignore credit constraints - I think that fits your argument here. But I don't think that would have made sense for me - my money, and my material goods, matter more to me now than they did when I was young. It makes sense for me to have deferred consumption until now. At least, so I imagine.

Luis Enrique

oh, and it makes perfect sense to me for the discount rate used when thinking about how policies affect different generations, to differ from the personal discount rates we might think of as being used by individuals themselves.


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Chris E

Or Steely Dan's music of yesteryear may well have been objectively better - both in terms of using better musicians (they lucked onto the West Coast session scene of the time) and being more compositionally varied.

One could direct the same arguments you do to the music one *composes* when one is 20 as opposed to the that which one composes when one is 50.


I'm not trying to maximise utility over my lifetime, I'm trying to ensure that my utility stays above a particular point throughout my life - the point at which I'm happy and not depressed. It sounds like avoiding depression gets more expensive as you get older. What's the point in wasting money to go from "happy" to "really happy" when you're young, when you could save that money and prevent yourself from going from "happy" to "depressed" in later years. I may not get a great deal of pleasure from the latest Sun Kil Moon album, but it's the only thing keeping me sane.


The premise is wrong, the problem is not inter-generational, but the incompetent management by the current political class.

That explains the quality of life been reduced for everyone.

This is reflected in the Telegraphs 'Brain Drain' stories.


The current political class is failing us all, assets and income may make it easier.

The good news, we are not a poor country yet.

"The study also suggested that migrants who move to the UK from elsewhere in Europe are much less likely to stay than those from poorer parts of the world, who add to Britain’s long-term population."

Just give them time as the political class accelerate our decline.

It incompetence not inter-generational that is just more right wing propaganda like the deficit is our children's debt.

You can't move consumption effectively over time, like time it's self, you use it or loose it. You never get it back (despite the false promises of the pensions industry).

Each generation live in it's own time, and the current political class are failures and so the people currently alive, of all ages suffer the consequences, wealth and status may provide a limited buffer, but it was ever so...

Luis Enrique

"This implies that there's a case for a negative discount rate across generations ... It might be optimal to reduce today's pensioners' spending so that we increase the spending of future generations of young folk!"

isn't this muddling up two different things - 1. whether actions today increase/decrease consumption of future generations
2. how consumption is divided between young and old at any point in time.

if we reduce today's pensioners' spending how do we know it would be tomorrows pensioners that benefit?

Luis Enrique

oops - muddled that. meant "how do we know it would not be tomorrow's pensioners" - having a negative discount rate across generations does not tell you that the youth will be favoured within generations.

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