The lifetime pattern of income and consumption. Assuming that children are supported by their parents, young adults start with low incomes, which rise with age until sometime in middle age, after which they fall, possibly quite sharply, on retirement. Little earned income is usually received after retirement. Consumption is generally highest in the early years of adult life when household goods have to be bought and children reared. This results in a pattern of savings, which are generally small in early adult life, large for a period after the children are grown, and negative during retirement. Household assets thus tend to rise before retirement and fall afterwards. Whether assets actually start and finish at zero depends on social habits as regards inheritance: most people leave positive assets at death, if only because they do not know when this will occur. The life-cycle model of savings suggests that the distribution of assets will be uneven between households even if their lifetime incomes and social attitudes are the same.

• optimum currency area
• optimum savings
• optimum tariff
• option
• option value
• order book
• order-driven market
• order of integration
• orders, new
• ordinal utility
• ordinary least squares
• ordinary share
• organizational slack
• Organization for Economic Cooperation and Development
• Organization of Petroleum Exporting Countries
• organized labour
• organized sector
• origin
• oscillation
• oscillatory function
• other things being equal
• outcry, open
• outflow, capital
• outlier
• output