make the elderly save more. The second explanation is that the elderly may save more in order to leave bequests to their children.This will discourage dissaving at the expected rate. Overall research on the retired section of the society show that the life-cycle model cannot completely explain consumer behaviour.Providing for retirement is an important reason for dissaving.However precautionary saving and bequests are also important. Never heard of Modigliani, it just made sense to me that with far less income and similar consumption retirees would be saving less, and in many cases, living off their accumulated savings. I know studies based only on age, without regard to employment status, show that older people have higher incomes and more assets. What is the difference between nominal and real, in this context? We're talking about saving as a percentage of nominal income, right? Current nominal income, not compared to some past number that needs inflation-adjusting? Oh, wait, it makes sense if you are saying that the nominal lifetime accumulated savings (i.e., net worth) of retirees continues to rise even after retirement? As asset values rise with inflation, creating mythical capital gains income. And Modigliani could still be right "in real terms" if they spend all their real current cash income plus some of the mythical capital gains. Most of the 7 made sense, but #5 about the trade deficit not causing unemployment was a complete travesty. What is so hard to understand about that? When the economy is outsourced, there is less economic