(savings) and future income. The marginal propensity to consume (MPC) out of each of these accounts is different. Drawing upon empirical studies of consumption, superannuation and windfall gains they hypothesize that the MPC is close to one out of current income, close to zero for future income and somewhere in between with respect to current assets. These differing MPCs explain why people 'overconsume' during their highest earning years, why increasing superannuation contributions does not cause current savings to be reduced (as the life-cycle model implies) and why small windfall gains (which are coded as current income) are consumed at a high rate but a higher proportion of larger gains is saved. See also Albert Ando Dissaving Intertemporal choice Permanent income hypothesis Temporal discounting Wealth elasticity of demand References Fisher, I (1930): The Theory of Interest Harrod, R. (1948): Towards a Dynamic Economics Friedman, M. (1957): A Theory of the Consumption Function Modigliani, F. & Brumberg, R. (1954): 'Utility analysis and the consumption function: An interpretation of cross-section data'. In: Kurihara, K.K (ed.): Post-Keynesian Economics Shefrin, H. & Thaler, R. (1992): 'Mental Accounting, Saving and Self-Control'. In: Lowenstein, G. & Elster, J. (eds.) Choice over Time Intertemporal economics Consumption fr:Cycle de vie (commerce)#Théorie du cycle de vie en sciences économiques