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New Result in Consumption Theory:Change in Savings and Income Growth – Nineteen Years Later

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  • Cheng K. WU

    (Growonders Corp., USA.)

Abstract

This new version uses the definitions and some of the results found in Sargent’s Macroeconomic Theory. Hall’s (1978) proof of the corollary 4,ct+1 = ct, can be found in Flavin (1981). Writing the same consumption stated in Flavin, for period t+1, in a different way for the summation of the expected future incomes, it is possible to show that changes in savings is a function of income growth. This new result has implications, for instance, in Keynes’ (1936) saving and dissaving.

Suggested Citation

  • Cheng K. WU, 2016. "New Result in Consumption Theory:Change in Savings and Income Growth – Nineteen Years Later," Journal of Economics Library, KSP Journals, vol. 3(1), pages 77-81, March.
    • Handle: RePEc:ksp:journ5:v:3:y:2016:i:1:p:77-81
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    References listed on IDEAS

    as
    1. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, June.
    2. Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
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    Cited by:

    1. Wu, Cheng, 2018. "Clower’s Dual-Decision Hypothesis is economics," MPRA Paper 84013, University Library of Munich, Germany.
    2. Cheng K. WU, 2017. "Does Clower’s Dual-Decision Hypothesis lead to the change in saving conclusion in Keynes’s General Theory?," Journal of Economics Library, KSP Journals, vol. 4(4), pages 552-560, December.
    3. Cheng K. WU, 2018. "Clower’s Dual-Decision Hypothesis is economics," Turkish Economic Review, KSP Journals, vol. 5(1), pages 83-88, March.

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    More about this item

    Keywords

    Consumption; Martingale; Savings; Growth; Income.;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches

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