Franco Modigliani

“made two path-breaking contributions to economic science:

  • He was also the originator of the life-cycle hypothesis, which attempts to explain the level of saving in the economy. Modigliani proposed that consumers would aim for a stable level of consumption throughout their lifetime, for example by saving during their working years and spending during their retirement.”

Modigliani  “(June 18, 1918 – September 25, 2003) was an Italian-American economist at the MIT Sloan School of Management and MIT Department of Economics, and winner of the Nobel Memorial Prize in Economics in 1985.”

Source

Bibliography at RePec

The life cycle hypothesis of saving is a testable proposition; and will be tested in the next few decades as large numbers of people in the developed world retire and must use their savings to pay their bills.

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