Clower’s Dual-Decision Hypothesis is economics

Cheng Wu

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Keynes; Clower; Keynesian; disequilibrium; Dual Decision Hypothesis; consumption; martingale; saving; growth; income; trade; feedback (search for similar items in EconPapers)
JEL-codes: A10 B20 C0 D1 E2 N0 O4 P0 (search for similar items in EconPapers)
Date: 2018-01-21
New Economics Papers: this item is included in nep-hme, nep-hpe, nep-mac and nep-pke
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