Relative Income Hypothesis1 min read


Relative Income Hypothesis

Relative income hypothesis states that the saving decision or saving function or saving ratio is independent to an absolute level of income rather it depends upon the relative portion of the individual in the income distribution of society and previous peak level of income.

Meaning

Relative Income Hypothesis

Assumptions

Relative Income Hypothesis Relative Income Hypothesis

Mathematical Derivation

Relative Income Hypothesis Relative Income Hypothesis

Reconciliation of Short-run and Long-run consumption function

Relative Income Hypothesis Relative Income Hypothesis

Figurative analysis

Relative Income Hypothesis Relative Income Hypothesis Relative Income Hypothesis

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Other online resources

Relative_Income_Hypotheses | Wikipedia

Suggested Readings:

Vaish. MC. (2010). Macroeconomic Theory. (14th Ed.). New Delhi: Vikas Publishing House Pvt. Ltd.

Relative Income Hypothesis1 min read
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