Re: saving and finance and an answer to Basil Moore

["Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>]

Paul:

Re:

> the unlikely hypothetical case where all spenders in a particular
> nation to have an AVERAGE PROPENSITY to Consume >1 -- NOT THE MPC as you
> suggest!!!

What's the difference?

Let ALL income recipients 'earn' $100 and 'spend' $100.

How does the AVERAGE PROPENSITY to Consume differ from the MARGINAL - as in
$100 out of $100 - PROPENSITY to Consume?

Gunnar



----- Original Message -----
From: "pdavidso" <pdavidso@xxxxxxx>
To: "Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Wednesday, April 23, 2003 6:06 PM
Subject: RE: saving and finance and an answer to Basil Moore


> >===== Original Message From Gunnar Tomasson <gunnar.tomasson@xxxxxxxxxxx>
> =====
> >Paul wrote:
> >
> >> [If you decide to spend more than your income this pay period, (this
is,
> >> your first time preference decision to spend more than you earn this
> >> period) then your second decision (liquidity preference) is what time
> >> machine(s) [liquid asset(s)] should you liquidate in order to finance
your
> >> purchases in excess of income this period.
> >
> >In other words, if MPC > 1 for ALL income recipients, "liquidity
preference"
> >determines which assets they draw on to finance total outlays in excess
of
> >total income.
> >
>
> No Gunnar  if you read the above you will not the sentence has a singular
as
> the subject matter!!!!!!!this is for each indivdual -- not for all
spenders in
> the aggregate economy; this does allow for the possibility ,in an open
> economy, the unlikely hypothetical case where all spenders in a particular
> nation to have an AVERAGE PROPENSITY to Consume >1 -- NOT THE MPC as you
> suggest!!!
>
> Paul
>
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> University of Tennessee
> SMC 503
> Knoxville, Tennessee 37996-0550
> office phone #;(865)974-4221; office fax# (865)974-1686 or (865)974-4601
> home phone and fax # (865)692-0802
> email pdavidson@xxxxxxx
> http://econ.bus.utk.edu/davidsonextra/Davidson.html
>
>