Describe how the permanent income hypothesis attempts to resolve the Kuznets’ puzzle on consumption function.

The Permanent Income Hypothesis (PIH) is an economic theory that seeks to explain how individuals make consumption decisions based on their perceived permanent income rather than their current or transitory income. The theory was first developed by the economist Milton Friedman in the late 1950s as an attempt to address some of the discrepancies and puzzles that existed within the traditional Keynesian consumption function framework, one of which is often referred to as the "Kuznets' puzzle."

The Kuznets' puzzle refers to an empirical observation made by economist Simon Kuznets, who noticed that despite substantial increases in average income over time, the _________ ______ ____ ________ _____ ________ _____ ____ _______ ______ _____.
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