Question: How do the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces of evidence regarding consumption behaviour?

How do the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces of evidence regarding consumption behaviour?

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Both the lifecycle and permanentincome hypotheses emphasize that an individuals time horizon is longer than a single year Thus consumption is not simp... View full answer

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1)How do the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces of evidence regarding consumption behavior? (20 points)

Ho do the life-cycle and permanent-income hypothesis resolve the seemingly contradictory pieces of evidence regarding consumption behavior?

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