Franco Modigliani and the life-cycle theory of consumption
AbstractThis paper reviews and discusses the contribution by Franco Modigliani to macroeconomic model building for economist forecasting and policy making. As Paul Samuelson observed, Modigliani's theoretical work was fundamental in the development of the basic framework within which the "post-Keynesian eclecticism" of the later twentieth century developed. In the move from theory to practice two aspects of Modigliani's work are considered: 1) the systemic approach that focuses on the relationship between the short and the long term, 2) the special reference to the mechanism of monetary policy transmission in the use of the macroeconomic model for economic stabilisation policy. What is left today of this contribution is finally briefly discussed, also with reference to some recent proposals on macroeconomic model building.
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Bibliographic InfoArticle provided by Banca Nazionale del Lavoro in its journal Banca Nazionale del Lavoro Quarterly Review.
Volume (Year): 58 (2005)
Issue (Month): 233-234 ()
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Web page: http://www.economiacivile.it
Other versions of this item:
- Angus Deaton, 2005. "Franco Modigliani and the life-cycle theory of consumption," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 91-107.
- B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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