Time Discounting & Present Value: Why is the future worth less?

This video explains time discounting and present value. I answer the question "Why is the future worth less?" and show how economists model that.

0:00 - Intro
0:27 - Thought Experiment
1:43 - Instantaneous Utility
2:11 - Present Value
4:03 - Why do people prefer cake today?
5:45 - Money
9:40 - Why is it Called Present Value?
10:02 - Formula

[syrinefrini]

Dear Ashley, thank you for your informative and very helpful videos. Keep up the great work! Greetings from Germany

[lollo_pap]

awesome video and clear explanation. thank you!

[yrr]

I wish you were my professor XD Thanks a lot for the nice lectures !

[ahmedbellankas]

Please, can you do a video on austrian economics and talk about what relation it can have with behavioral economics.

[shlomozerbib]

What economists think about negative interest rates (e.g. in Europe) in terms of agents preferences choices?

[Potencyfunction]

🤣 Aha. The flour in dough will be double after one year, the eggs will be also double, the electricty prices are blowing up, the rents for shops are incereasing etc and you tell me that cake will next year have the same price?