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What is meant by the phraseconsumption smoothing and why is it akey element of the life-cycle hypothesis and the permanent-income hypothesis? Suppose that the evidence

What is meant by the phrase"consumption smoothing" and why is it akey element of the life-cycle hypothesis and the permanent-income hypothesis?

Suppose that the evidence from an econometric analysis suggest that consumption changes by more or less than the change in permanent income. What would this mean? Discuss.

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