Consider a representative consumer who lives 2 periods and has the following utility function = V= c c where c and c represent consumption in the current and future periods, respectively. is the discount factor where = 1 / ( 1 ) =1/(1 ) with > 0 >0 being the rate of time preference. The current-period budget constraint is given by = c s=yt, and the future-period budget constraint is given by = ( 1 ) c =y t (1 r)s