Income Smoothing and Consumption Smoothing

Summer 1995
By Jonathan Morduch

Income Smoothing and Consumption Smoothing
Two observations are essential to understanding the market structure of most low-income economies.  First, many markets do not exist and, of those that do, many work imperfectly.  Second and more optimistically, a wealth of behavioral and institutional responses often emerge to fill in the holes left by market failures. . .