Time Inconsistency

“Have you ever bought something you really couldn’t afford? You simply swipe your credit card and leave the store with something shiny and new. That instant gratification overpowers any thought of the regret you’ll have when you must start paying off your accumulated debt. Economists call this phenomenon time inconsistency….”, excerpt from Time Inconsistency: Today’s Actions = Tomorrow’s Regrets, St Louis Fed Liber8 Newsletter, September 2011.