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Essay Income Theory
Essay Income Theory
Essay Income Theory
function" was introduced by John Maynard Keynes. His analysis has become
only the more quantitative aspects of his considerations, popularly known as the
"Absolute Income Theory", despite the fact that he did not provide a precise
less than one. The theory concerns how a consumer divides his disposable income
On the other hand, in 1949, James Duesenberry formulated the "Relative Income
saving is influenced more by his relative income than by his abstract standard of
living.
merge three sets of data that seem to be incompatible. These are the cross-
sectional data or budget studies data, cyclical or short run time-series data and
Kuznets’ long run time-series data. The basic relationship between consumption and
The theories mentioned above has greatly affected the economy worldwide. The
application may vary from time to time yet it is so important to learn from these
hypothesis.