Income Distribution, Consumption, and Economic Growth in Italy: Kaldor’s Theory versus the Life Cycle Hypothesis, 1960s and 1970s

The paper discusses Modigliani, Brumberg, and Ando’s life cycle hypothesis and its difficult acceptance in Italy over the 1960s and 1970s. The increasing attention to the effects of income redistribution on consumption coupled with the strong influence that post-Keynesian economics exercised on the theoretical and political debate of that time led to a widespread preference of Kaldor’s theory as over the life cycle as the best representation of Italian savings behavior.