Capitalism
The permanent income hypothesis is an economic theory proposed by Milton Friedman that suggests individuals base their consumption choices on their expected long-term average income rather than their current income. This theory emphasizes that people will smooth their consumption over time, planning for future income changes while reacting less to temporary fluctuations in income. It has important implications for understanding consumer behavior, savings, and economic policies.
congrats on reading the definition of Permanent Income Hypothesis. now let's actually learn it.