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Dynamic Analysis of Demand Psychology and Policy Implications

In: Human Psychology and Economic Fluctuation

Author

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  • Hideaki Tamura

Abstract

In this chapter we analyze demand psychology based on a dynamic framework in which the representative household considers the amounts it is prepared to spend on “reconsumption” of goods (“purchase (decision) prices”), and look at economic stimulus measures that are likely to be highly effective from a short-term perspective. We then look at non-discriminatory spending policy that provides a boost to buying power for all households in accordance with the principle of fairness, and show that discriminatory (selective) policy targeting those specific households that are prepared to spend additional funds on consumption goods may be effective during a deep recession.

Suggested Citation

  • Hideaki Tamura, 2006. "Dynamic Analysis of Demand Psychology and Policy Implications," Palgrave Macmillan Books, in: Human Psychology and Economic Fluctuation, chapter 0, pages 135-152, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-50563-6_8
    DOI: 10.1057/9780230505636_8
    as

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