Intertemporal Equilibrium

See: Intertemporal Substitution Effect.

An intertemporal equilibrium is a market equilibrium that’s analyzed across multiple time periods rather than as a snapshot in time.

Why? Because that’s how people and firms make decisions. If you’re not going grocery shopping today...nor tomorrow...you’ll eventually have to go (and go you will...and spend). Firms might decide to save, save, save...waiting for the right moment in invest in more equipment and land, at which point they’ll be spending and investing.

Since we all make decisions based on some rhythmic time scale, we should be looking at market equilibriums intertemporally, too. Austrian economics theorizes that there’s almost always a long-term equilibrium, so current states of disequilibrium are assumed to be short-lived: part of a larger picture of balance.