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What is Keynesian consumption theory?
Keynes's consumption function only uses income to explain consumption, which is called the absolute income hypothesis. This assumption is too simple and rough, and the error is large when it is used for prediction. As an important theory of modern western economics, Keynes's consumption function theory has duality. On the one hand, it starts from the capitalist system and serves the economic interests of the bourgeoisie; On the other hand, if the economy wants to get rid of the crisis and grow steadily, it will inevitably reveal the general operating law of the market economy to a certain extent.
Extended data:
Subjective factors of social consumption. Analyze the factors that affect the motivation of saving, including prudence, foresight, calculation, improvement, independence, enterprising, pride and greed. Then the subjective factors that directly affect consumption are summarized as hedonism, shortsightedness, generosity, miscalculation, ostentation and extravagance and so on. These factors depend on the influence of system, tradition, capital, technology and equipment, which are not easy to change in the short term and can be regarded as quantitative. This proves once again that consumption is a stable function of income, which of course refers to the absolute income level of the current period.
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