Re: consumption

[BMCFARLING@xxxxxxxxxxxxxx]

On Thu, 30 Jun 1994 13:02:44 -0600, Alan Isaac queries:
> Any reactions to the Feb 94 QJE article by Carroll showing that
> current consumption is corrollated with current rather than
> lifetime income? It carefully distances itself from "Keynesian"
> consumption theory in the following way: "consumption responds
> strongly to uncertainty in future income--implying that consumers
> are rational and forward-looking (and hence not Keynesian)."

     I for one agree that these are not Keynesian consumers. Current
consumption correllated with current income and individuals in the economy
responding strongly to uncertainty in future income is Keynes himself, so
clearly not Keynesian, although quite possibly Post-Keynesian. What will
show up next, vector autoregressive confirmation that nominal injections
result in sufficient leakages, so long as finance is not a constraint? --
which is trumpeted as not Keynesian because the finance motive undermines
ISLM analysis? How many times, and under how many banners, do these wheels
have to be re-invented?

Virtually,

Bruce McFarling, Pellissippi State
bmcfarling@xxxxxxxxxxxxxx (through July 1)