In case both rates were equal, given an anticipated shock to the labor income, rational individual would hold a large stock of assets to hedge for the income risk.

The central banker once dubbed 'the maestro' had believed that the self-interest of rational individuals would bring about the best outcome.

Rational individuals take sequential decisions to achieve a coherent and stable future goal using currently available information.

This discussion has been conducted almost entirely for self-interested rational individuals.

Many economists have regarded this as unrealistic, believing that rational individuals would sooner or later realize the trend and take it into account in forming their expectations.