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In economics, the life-cycle hypothesis (LCH) is a model that strives to explain the consumption patterns of individuals. Theory and evidence. Elderly dissaving is also influenced by the present factors that materially prevent them from the possibility of spending their previous savings. One of them is the loss of the driving license.
Product life-cycle theory. The Product Life Cycle Theory is an economic theory that was developed by Raymond Vernon in response to the failure of the Heckscher–Ohlin model to explain the observed pattern of international trade. The theory suggests that early in a product's life-cycle all the parts and labor associated with that product come ...
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 ...
Franco Modigliani. Franco Modigliani (18 June 1918 – 25 September 2003) [1] was an Italian-American economist and the recipient of the 1985 Nobel Memorial Prize in Economics. He was a professor at University of Illinois at Urbana–Champaign, Carnegie Mellon University, and MIT Sloan School of Management .
Consumption smoothing is an economic concept for the practice of optimizing a person's standard of living through an appropriate balance between savings and consumption over time. An optimal consumption rate should be relatively similar at each stage of a person's life rather than fluctuate wildly. [1] [2] Luxurious consumption at an old age ...
This theory explains the nature and causes of economic cycles from the viewpoint of life-cycle of marketable goods. The theory originates from the work of Raymond Vernon, who described the development of international trade in terms of product life-cycle – a period of time during which the product circulates in the market. Vernon stated that ...
Life-cycle cost analysis. Life-cycle cost analysis (LCCA) is an economic analysis tool to determine the most cost-effective option to purchase, run, sustain or dispose of an object or process. The method is popular in helping managers determine economic sustainability by figuring out the life cycle of a product or process.
Proposed economic waves. In economics, Kondratiev waves (also called supercycles, great surges, long waves, K-waves or the long economic cycle) are hypothesized cycle-like phenomena in the modern world economy. [1] The phenomenon is closely connected with the technology life cycle.
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