Macroeconomic model reference
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.
Theory-based models · Model choice
Permanent Income Hypothesis versus nearby models
Compare Permanent Income Hypothesis with nearby alternatives, local saved scenarios, data needs, assumptions, strengths, weak points, and use case.