Clower’s Dual-Decision Hypothesis is economics

Wu, Cheng (2018): Clower’s Dual-Decision Hypothesis is economics.

Abstract

Though Wu (2017) has shown Clower’s Dual Decision Hypothesis leading to Keynes’ change in saving (and disequilibrium) conclusion, it is important to compare Clower’s budget constraint approach with other models, including those found in Hall’s consumption theorem and similar approach. In Clower, by assuming that, consumers may not satisfy the budget constraint, one cannot automatically assume Hall’s consumption theorem to hold. And, by showing how households need to optimize contingent on the satisfaction of their budget constraint, Clower was, in effect, creating a feedback mechanism.

• Item Type: MPRA Paper
• Language: English
• Keywords: Keynes; Clower; Keynesian; disequilibrium; Dual Decision Hypothesis; consumption; martingale; saving; growth; income; trade; feedback
• Subjects: A - General Economics and Teaching > A1 - General Economics > A10 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B20 - General; C - Mathematical and Quantitative Methods > C0 - General; D - Microeconomics > D1 - Household Behavior and Family Economics; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; N - Economic History > N0 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; P - Economic Systems > P0 - General

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Wu, C. K. (2017), " Does Clower’s Dual-Decision Hypothesis lead to the change in saving conclusion in Keynes’s General Theory?," Journal of Economics Library, Vol. 4, No. 4, Dec. 2017. pp. 552-560, http://www.kspjournals.org/index.php/JEL/article/view/1497