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This book contains a survey of the Life-cycle Theory and presents a summary of the saving function framework. The life-cycle theory explains the consumption and saving decisions in function of the different phases in life. During childhood, the individual consumes and receives his education. In a second stage, the individual actively consumes, produces and saves. In a third phase, the individual uses his accumulated net wealth, including the amount of social security wealth, to finance his consumption of life-cycle during retirement. This textbook is tailored to suit the needs of students who are pursuing macroeconomics course.
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