Accelerator Theory and its Process
The accelerator theory explains the relationship between change in output or income and the rate of investment. In this theory, a change in income or output causes a change in…
Macroeconomic theory and evidence
The accelerator theory explains the relationship between change in output or income and the rate of investment. In this theory, a change in income or output causes a change in…
The life-cycle hypothesis was postulated by Ando and Modigliani in an attempt to explain the behaviour of consumption function in the long and short run. According to this theory, current…
Duesenberry took a different approach to develop a model explaining consumption behaviour. While other models such as the permanent income hypothesis are based on utility function independent of consumption by…