This chapter and the following three will be theoretical in character. Our aim in these chapters will be to expound the theoretical work on dynamic, short-run macro-relationships which has been done in recent years in the spirit of Keynes, and to give an account of the British empirical research which bears on this work. By this means we hope to provide a strong theoretical framework for the discussion of the central chapters of this part of the book, namely Chapter 6 on policy in relation to the internal balance objective and Chapter 7 on policy in relation to the objective of external balance.
KeywordsDisposable Income Aggregate Demand Equilibrium Path Consumption Function Permanent Income
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