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Macro by Mark

Global Economic Data, Empirical Models, and Macro Theory
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Public data from government agencies and multilateral statistical releases, anchored in official sources

© 2026 Mark Jayson Nation

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Theory-Based Models

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Permanent Income Hypothesis
Model

Friedman's Permanent Income Hypothesis: consumption depends on permanent income, not current income. C = k * Y_P, where permanent income Y_P is an adaptive-expectations weighted average of current and past income.

Why does consumption respond weakly to temporary income changes but strongly to perceived permanent ones?

Composition

CCC
Consumption

Planned consumption expenditure, determined by per...

YPY_PYP​
Permanent income

The income level households expect to persist. Com...

YTY_TYT​
Transitory income

The gap between actual current income and permanen...

GraphProofCompare

Short Run Equilibrium

Consumption

88.2

Permanent income

98.0

Transitory income

2.0