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

Wu, Cheng (2016): New Result in Consumption Theory: Change in Savings and Income Growth – Nineteen Years Later.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: consumption; martingale; savings; growth; income
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General; F - International Economics > F0 - General; F - International Economics > F0 - General > F00 - General; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N10 - General, International, or Comparative

References

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