Wu, Cheng (2018): Clower’s Dual-Decision Hypothesis is economics.
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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 |
|---|---|
| Original Title: | Clower’s Dual-Decision Hypothesis is economics |
| 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 |
| Item ID: | 84013 |
| Depositing User: | Mr. Cheng Wu |
| Date Deposited: | 22 Jan 2018 06:33 |
| Last Modified: | 27 Sep 2019 12:37 |
| References: | Chiarella et all (2012), Reconstructing Keynesian Macroeconomics Vol. 1, Routledge. Clower, R. W. (1965), "The Keynesian Counterrevolution: A Theoretical Appraisal," in The Theory of Interest Rates, ed. F.H. Hahn and F.P.R. Brechling, Macmillan, pp. 103-25. Clower, R. W. (1967), “A Reconsideration of the Microfoundations of Monetary Theory,” Western Economic Journal 6, pp. 1-8. Fisher, Irving (1930), The Theory of Interest, MacMillan, New York. Flavin, M. A. (1981), "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, vol. 89, no.5, pp. 974-1009. http://www.jstor.org/stable/1830816?seq=1#page_scan_tab_contents http://dx.doi.org/10.1086/261016 Friedman, M. (1957), A Theory of the Consumption Function, Princeton University Press. Hall, R. E. (1978), "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, pp. 971-87, October 1978. https://doi.org/10.1086/260724 Keynes, J. M. (1936), The General Theory of Employment, Interest, and Money, Hartcourt Brace Jovanovich. Leijonhufvud, A. (1968), On Keynesian Economics and the Economics of Keynes: A Study in Monetary Theory, Oxford University Press. Modigliani, F. and Brumberg R. (1954), "Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data," in K. K. Kurihara, ed., Post-Keynesian Economics. Rutgers University Press. Modigliani, F. and Brumberg R. (unpublished manuscript 1952, published 1979), "Utility Analysis and Aggregate Consumption Functions: An Attempt at Integration," in The Collected Papers of Franco Modigliani, ed. A. Abel, Vol. 2, MIT Press. Wu, C. K. (2016), "New Result in Theory of Consumption: Changes in Savings and Income Growth - Nineteen Years Later," Journal of Economics Library, Vol. 3, No. 1, pp. 77-81, http://www.kspjournals.org/index.php/JEL/article/view/684. http://dx.doi.org/10.1453/jel.v3i1.684 Wu, C. K. (2017), “Economics and how Obama could have lost the 2016 election too”, Journal of Social and Administrative Sciences, Vol. 4 (3), September 2017, pp.283-288. http://www.kspjournals.org/index.php/JSAS/issue/view/95. http://dx.doi.org/10.1453/jsas.v4i3.1430 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 |
| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/84013 |
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