Saving and Consumption Decisions

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.