Permanent Income ·
Smooth What Volatility Hides
un
seel
.com · Friedman 1957 · C = β·Y
P
+ (1−β)·Y
T
MPC perm
—
MPC trans
—
Beat
—
Income (volatile)
Permanent income Y
P
Consumption (smooth)
Transitory shock
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.com · Permanent Income Hypothesis