Saturday, June 11, 2005

Resurrection

Economic View: A long-vanished theory proves worthy after all - Business - International Herald Tribune
Any successful consumption theory must accommodate three basic patterns: The rich save at higher rates than the poor; national savings rates remain roughly constant as income grows; and national consumption is more stable than national income over short periods. The first two patterns appear contradictory: If the rich save at higher rates, savings rates should rise over time as everyone becomes richer. Yet this does not happen.
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