Tuesday, January 6, 2009

An Economist's Style Resolution

The following is a new year's resolution that takes some really basic ideas about two-good economies and applies them to getting in shape. Since most of the economic incentive to keep up with the project is social pressure, I"m publishing it to increase that pressure.

The Double-bound Capital Acquisition Project (D-CAP)

In the hopes that good money should not go after bad , I hereby set out to begin a fund of $90 per month (~X% [sorry I don't intend to broadcast my net earnings, and not because they're very high] of net earnings). The double bound capital fund, hereby known as the l fund, will be held via accounting in my personal Finances spreadsheet and counted against spending at the start of each month. The fund will serve to 1) ensure that a fixed amount of income is directed toward capital, 2) incentive good health, and 3) demand a more precise accounting of monthly expenditure.

The fund (F) must be expended each month in full (efficiency). The fund may be expended either upon Investment or capital.

Investment (I) includes: Debt service, a set-aside fund for investment in mutual funds.

Capital (K) shall include: clothing, athletic wear, timepieces, or any other persistent good designed for personal use. K is to exclude objects purchased as gifts.

Without constraints, these assumptions demand that

F=I+K where F=F-bar=90

A second condition is imposed upon the amount of the fund directed toward capital using a function of workout performance. The purpose of these kink points is to encourage training for the 10-mile run on Sun, April 5, 2009. These formulas produce kinks in the consumption possibilities of the fund

Activity (ai)
Return (ri)

Run <3mi

Run >3mi

bike <20 min

bike >20 min

rowing >10 min

Kmax=Min [80, ri*ai]

Preferences are assumed to be strictly concave. Therefore F=I+ Min [80, ri*ai]

This project shall last for a term of no less than three months.


1 comment:

Michael said...

What is wrong with you?

<3, your roommate