Franco Modigliani and the life-cycle theory of consumption

Abstract

This paper reviews and discusses the contribution by Franco Modigliani to macroeconomic model building for economist forecasting and policy making. As Paul Samuelson observed, Modigliani's theoretical work was fundamental in the development of the basic framework within which the "post-Keynesian eclecticism" of the later twentieth century developed. In the move from theory to practice two aspects of Modigliani's work are considered: 1) the systemic approach that focuses on the relationship between the short and the long term; 2) the special reference to the mechanism of monetary policy transmission in the use of the macroeconomic model for economic stabilisation policy. What is left today of this contribution is finally briefly discussed, also with reference to some recent proposals on macroeconomic model building. JEL Codes: B21, B22, B31, D91, E21

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 63 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.