Abstract
Keynes (1936) introduced the consumption function as the relationship between consumption and income. Although Keynes (pp. 95–6) believed this relationship ‘a fairly stable function’, substantial shifts in the function were soon observed by empirical workers. Much work in the post-World War II era achieved functional forms by the 1970s which admirers and critics alike could agree were relatively shiftless. Most recent work has considered not functional form but whether or not observed changes in consumption are consistent with models of efficient markets.
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Darby, M.R. (2018). Consumption Function. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_312
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DOI: https://doi.org/10.1057/978-1-349-95189-5_312
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