Italian-born US economist, noted for his ‘lifecycle hypothesis’ and Modigliani–Miller theorem, established with US economist Merton Miller . He was awarded the Nobel Prize for Economics in 1985 for his analysis of household savings and financial markets. According to English economist John Maynard Keynes , the average propensity to save – the ratio of savings to income – increases as household income increases, and yet historical evidence shows no tendency for the saving rate to rise as all households become richer. US economist Milton Friedman's ‘permanent income hypothesis’ – which states that saving is a function, not of current income, but of expected lifetime income – provides one way of reconciling cross-sectional data with time-series data on savings. Modigliani's ‘lifecycle hypothesis’ – which states that individuals save during their earning years and ‘dissave’ after retirement – provides another: although all household income is consumed over the life cycle, a growing economy…