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See Intertemporal choice § Modigliani's life cycle income hypothesis for details. The life-cycle model of consumption suggests that consumption is based on average lifetime income instead of income at any given age. First, young people borrow to consume more than their income, next, as their income rises through the years, their consumption ...
He taught geography at Yale (1907–1915) and from 1917 was a research associate there, devoting his time chiefly to climatic and anthropogeographic studies. He was the 1916 recipient of the Elisha Kent Kane Gold Medal from the Geographical Society of Philadelphia. In 1909, Huntington led the Yale Expedition to Palestine. It was his mission to ...
The overlapping generations (OLG) model is one of the dominating frameworks of analysis in the study of macroeconomic dynamics and economic growth.In contrast to the Ramsey–Cass–Koopmans neoclassical growth model in which individuals are infinitely-lived, in the OLG model individuals live a finite length of time, long enough to overlap with at least one period of another agent's life.
Monetary disequilibrium theory is a product of the monetarist school and is mainly represented in the works of Leland Yeager and Austrian macroeconomics. The basic concepts of monetary equilibrium and disequilibrium were, however, defined in terms of an individual's demand for cash balance by Mises (1912) in his Theory of Money and Credit.
Robert Hall was the first to derive the effects of rational expectations for consumption. His theory states that if Milton Friedman’s permanent income hypothesis is correct, which in short says current income should be viewed as the sum of permanent income and transitory income and that consumption depends primarily on permanent income, and if consumers have rational expectations, then any ...
The balance of trade improves over time as consumers react, returning to balance at month 3 and rising to a surplus of 150 million at month 4. In economics , the "J curve" is the time path of a country’s trade balance following a devaluation or depreciation of its currency, under a certain set of assumptions.
Cash value life insurance is permanent life insurance with a cash accumulation component. As long as premiums are paid, these policies are designed to last your entire life (typically up to a ...
Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations are accounted for by real, in contrast to nominal, shocks. [1] RBC theory sees business cycle fluctuations as the efficient response to exogenous changes in the real economic environment.