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 · Interactive graph
Permanent Income Hypothesis graph: parameters, shocks, and readouts
Use the Permanent Income Hypothesis graph to move parameters, inspect shocks, and read the model outputs that change.