Home > Terms > Armenian (HY) > կյանքի ցիկլի հիփոթեզ
կյանքի ցիկլի հիփոթեզ
An attempt to explain the way that people split their income between spending and saving, and the way that they borrow. Over their lifetime, a typical person’s income varies by far more than how much they spend. On average, young people have low incomes but big spending commitments: on investing in their human capital through education and training, building a family, buying a home, and so on. So they do not save much and often borrow heavily. As they get older their income generally rises, they pay off their mortgage, the children leave home and they prepare for retirement, so they sharply increase their saving and investment. In retirement, their income is largely or entirely from state benefits and the saving and investment they did when working; they spend most or all of their income, and, by selling off assets, often spend more than their income. Broadly speaking, this theory is supported by the data, though some economists argue that young people do not spend as much as they should on, say, being educated, because lenders are reluctant to extend credit to them. One puzzle is that people often have substantial assets left when they die. Some economists say this is because they want to leave a generous inheritance for their relatives; others say that people are simply far too optimistic about how long they will live. (See also permanent income hypothesis and relative income hypothesis. )
- Part of Speech: noun
- Synonym(s):
- Blossary:
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
- Product:
- Acronym-Abbreviation:
Other Languages:
Member comments
Terms in the News
Featured Terms
ձեռքերը կանթած
Դիրք, երբ ձեռքերը կոնքամասում են և արմունկներն էլ դուրս են հակված:
Contributor
Featured blossaries
tim.zhaotianqi
0
Terms
40
Blossaries
4
Followers
Top Ten Instant Noodles Of All Time 2014
Browers Terms By Category
- Railroad(457)
- Train parts(12)
- Trains(2)
Railways(471) Terms
- Dictionaries(81869)
- Encyclopedias(14625)
- Slang(5701)
- Idioms(2187)
- General language(831)
- Linguistics(739)
Language(108024) Terms
- Nightclub terms(32)
- Bar terms(31)
Bars & nightclubs(63) Terms
- Cooking(3691)
- Fish, poultry, & meat(288)
- Spices(36)
Culinary arts(4015) Terms
- World history(1480)
- Israeli history(1427)
- American history(1149)
- Medieval(467)
- Nazi Germany(442)
- Egyptian history(242)