Income Redistribution And Consumption Demand Control

The income redistribution in common sense is the transfer payment from (he higher income people to lower income people via the public section (i.e. the government). In this thesis, income distribution means the re-adjustment of income distribution proportions of people and household, which does not change the present total disposable incomes of all people and households. Some Neo-Keynesian researchers whose representative is the Neo-Cambridge School suggested that income redistribution could be used to realize the long terms and equilibrium national economy growth. Under the condition of lack of effective demand in china, some researchers also proposed to enlarge consumption demand by the way of redistribution of income. Can income redistribution adjust the aggregate consumption demand effectively in market economy? This thesis selects the question to study.The thesis reviews the thought source of controlling consumption demand and deciding the national income via income redistribution, and remarks on the representatively theories and opinions and studies the realization mechanism of controlling consumption via income redistribution. The thesis points out that there are two appraisement standards to judge whether an income redistribution be an effective means to control consumption demand. One is the feasibility of die income redistribution itself. Another is the capability of the income redistribution to adjust die consumption demand. The coefficient of reaction of die consumption demand responded to income redistribution is die proportion of alteration of consumption demand to die transfer payment amounts in an income distribution. It is die basic index to evaluate die control capability of income redistribution upon consumption demand. Only when die symbol of die coefficient of reaction is steady and die absolute numerical value or expected value of die coefficient of reaction is larger and its variance is smaller, it can be said that die income redistribution has enough capability of controlling consumption demand.The study upon consumer behavior and consumption function is die foundation of discussion of die capability of income redistribution to control consumption demand. Those consumption theories and functions take single consumer behavior as study object and make die rational consumer as research foundation are reliable micro-economy dieoretic bases to study die influence on consumption demand of income redistribution. The diesis studies many prevalent consumption theories and functions, such as Keynesian consumption theories with absolute income hypothesis and relative income hypothesis as representatives, certainty-type consumption decision theories with permanent income hypothesis and life cycle hypothesis as representatives, uncertainty-type consumption decision theories with random-walk hypothesis as representative. Some consumption functions under complicate conditions have also been given in die diesis.This paper discuss some things neglected by modem consumption theory and its economics foundation, include the substitution question between consume goods and consume money in inter-temporal consumption decision, die question of single piece property of consume goods and die question on mathematical express of consumer preference. The diesis notices die explanation ability of modem consumption theories on practical consumer behaviors has been weakened because of such negligences. The paper creates a hierarchy consumption decision model to improve present consumption theories on die foundations of new categorization of consume goods and rational consumer assumption. In the hierarchy consumption decision model, consume goods are divided into particular goods and normal goods according to die preference of die consumer The preference of consumer to particular goods has die property of absolute priority and self-saturation, so it can not be described by continuous utility function. Normal goods are divided into precious goods and common goods according to the judgement of die consumer, such as die...