The life-cycle hypothesis, fiscal policy and social security

Banca Nazionale del Lavoro Quarterly Review, 2005, vol. 58, issue 233-234, 173-186

Abstract: The paper reviews some of the most important results of the Life Cycle Hypothesis (LCH) for understanding individual and aggregate saving behaviour. It then turns to the implications for fiscal policy and social security, highlighting Modigliani’s seminal contributions. Over time competing theories have emerged, and some empirical findings are difficult to reconcile with LCH; chiefly aspects of inertia, myopia, and irrational behaviour documented by the recent behavioural literature. But the LCH is still the benchmark model to think about individual saving decisions, the aggregate evidence and policy issues.

Keywords: Consumption; Fiscal Policy; Life Cycle; Policy; Saving; Social Security; Wealth (search for similar items in EconPapers)
JEL-codes: D91 E21 E62 H55 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (5)

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Journal Article: The life-cycle hypothesis, fiscal policy and social security (2005)
Working Paper: The Life-Cycle Hypothesis, Fiscal Policy, and Social Security (2005)
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