Dynamic Analysis of Demand Psychology and Policy Implications

Hideaki Tamura

Chapter Chapter 7 in Human Psychology and Economic Fluctuation, 2006, pp 135-152 from Palgrave Macmillan

Abstract: Abstract In this chapter we analyze demand psychology based on a dynamic framework in which the representative household considers the amounts it is prepared to spend on “reconsumption” of goods (“purchase (decision) prices”), and look at economic stimulus measures that are likely to be highly effective from a short-term perspective. We then look at non-discriminatory spending policy that provides a boost to buying power for all households in accordance with the principle of fairness, and show that discriminatory (selective) policy targeting those specific households that are prepared to spend additional funds on consumption goods may be effective during a deep recession.

Keywords: Government Spending; Consumption Good; Purchase Price; Representative Household; Demand Psychology (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50563-6_8

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DOI: 10.1057/9780230505636_8

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