Abstract
Abstract. The authors investigate and analyze the possibility of the Modigliani–Ando–Brumberg life-cycle model to describe the relationship among income, consumption, savings, and inheritance of individual households of Ukraine’s economy by using the state statistics data of Ukraine. The features and contradictions of the assumption that a person has the desire to stabilize consumption and make it uniform throughout his life to Ukrainian households are tested.Key words: life cycle model, savings, income, debt, retirement, consumption, wealth, inheritance, constant consumption
Highlights
The consumption of the total population is one of the indicators of the economic growth and development of a country
It is necessary to find the data for the further processing in Excel and to build a linear regression, check the adequacy of the Modigliani–Ando–Brumberg model and the feasibility of its use on data obtained from the State Statistics website
We can conclude that the model of Modigliani–Ando–Brumberg is not usable for Ukraine’s economy
Summary
The consumption of the total population is one of the indicators of the economic growth and development of a country. The meaning of household savings is the desire to secure old age and to pass an inheritance to children or grandchildren, and the accumulation of financial resources to purchase real estate, land, and durable valuables. This aspect is considered in the theory of the life cycle. The Modigliani–Ando–Brumberg theory of the life cycle is based on the microeconomic planning of consumption and savings over a lifetime. There is a need for an analysis and study of the theory in a case study, because each nation and state have their own behaviour (consumption, savings, investment).
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