A theory of aggregate consumption
We develop a Keynesian model of aggregate consumption. Our theory emphasizes the importance of the relative income hypothesis and debt finance for understanding household consumption behavior. It is shown that particular importance attaches to how net debtor households service their debts, and that...
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Institutional Knowledge at Singapore Management University
2014
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sg-smu-ink.soe_research-31822018-07-20T04:36:12Z A theory of aggregate consumption KIM, Yun K. SETTERFIELD, Mark MEI, Yuan We develop a Keynesian model of aggregate consumption. Our theory emphasizes the importance of the relative income hypothesis and debt finance for understanding household consumption behavior. It is shown that particular importance attaches to how net debtor households service their debts, and that the treatment of debt-servicing commitments as a substitute for savings by these households creates the potential for 'sudden stops' in consumption spending (and hence aggregate demand). 2014-04-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/2183 info:doi/10.4337/ejeep.2014.01.03 https://ink.library.smu.edu.sg/context/soe_research/article/3182/viewcontent/Theory_of_aggregate_consumption_pv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University consumption household borrowing household debt relative income hypothesis Economic Theory Macroeconomics |
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consumption household borrowing household debt relative income hypothesis Economic Theory Macroeconomics |
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consumption household borrowing household debt relative income hypothesis Economic Theory Macroeconomics KIM, Yun K. SETTERFIELD, Mark MEI, Yuan A theory of aggregate consumption |
| description |
We develop a Keynesian model of aggregate consumption. Our theory emphasizes the importance of the relative income hypothesis and debt finance for understanding household consumption behavior. It is shown that particular importance attaches to how net debtor households service their debts, and that the treatment of debt-servicing commitments as a substitute for savings by these households creates the potential for 'sudden stops' in consumption spending (and hence aggregate demand). |
| format |
text |
| author |
KIM, Yun K. SETTERFIELD, Mark MEI, Yuan |
| author_facet |
KIM, Yun K. SETTERFIELD, Mark MEI, Yuan |
| author_sort |
KIM, Yun K. |
| title |
A theory of aggregate consumption |
| title_short |
A theory of aggregate consumption |
| title_full |
A theory of aggregate consumption |
| title_fullStr |
A theory of aggregate consumption |
| title_full_unstemmed |
A theory of aggregate consumption |
| title_sort |
theory of aggregate consumption |
| publisher |
Institutional Knowledge at Singapore Management University |
| publishDate |
2014 |
| url |
https://ink.library.smu.edu.sg/soe_research/2183 https://ink.library.smu.edu.sg/context/soe_research/article/3182/viewcontent/Theory_of_aggregate_consumption_pv.pdf |
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1770574242635579392 |