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January 25, 2010



"Funds-at-time-t are typically more valuable, since the economy usually grows and there are always opportunities to invest."

Also, at time t we have a lot of information about the usefulness of funds at time t but less about the usefulness of funds at time t+1. Thus, even in an economy without expectations of overall growth such that the average utility of funds at time t and t+1 is the same, there will always be more individuals aware of a high-utility use for funds at time t than at t+1. For all any of us know, we won't survive until t+1.

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