1. Life Cycle Hypothesis
.Understanding Consumption and Savings Patterns
.A graph showing consumption and savings over a lifetime
, What is “Life Cycle Hypothesis”
• Important post keynesian theory of consumption.
• Franco Modigilani,Albert Ando and Richard Brumberg put it
forward.
• Consumption is not a function of current income.
• Consumption is a function of lifetime expected income.
• Modigliani also said that income varies systematically over
people’s lives.
• it also brings assets into consumption determination
•
.Understanding Consumption and Savings Patterns
.A graph showing consumption and savings over a lifetime
, What is “Life Cycle Hypothesis”
• Important post keynesian theory of consumption.
• Franco Modigilani,Albert Ando and Richard Brumberg put it
forward.
• Consumption is not a function of current income.
• Consumption is a function of lifetime expected income.
• Modigliani also said that income varies systematically over
people’s lives.
• it also brings assets into consumption determination
•
