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.
Reconciliation of Short-run and Long-run consumption function
Our articles on Economics
Other online resources
Vaish. MC. (2010). Macroeconomic Theory. (14th Ed.). New Delhi: Vikas Publishing House Pvt. Ltd.