what is an example of the life cycle hypothesis 
a good example of the lch theory in practice is saving for retirement during your working years you save money for when you are no longer working knowing that you may not have income when you re older the bottom linethe life cycle hypothesis developed in the 1950s posits that people tend to maintain a consistent spending level over their lifetimes over time there have been criticisms leveled against the lch one is people don t always maintain a consistent pattern of consumption someone who is middle aged with a family of four and a mortgage is likely to consume more than at a time of life when they are retired and have no dependents and own their home however the lhc is still considered an important part of modern economic theory 2