At 13:41 29/06/98 -0400, Gil Skillman wrote:
>In "Why Do the Rich Save So Much?", NBER Working Paper 6549 (1998),
>Christopher D. Carroll argues that
>
> "...the saving behavior of the richest households cannot be
>explained by models in which the only purpose of wealth accumulation is to
>finance future consumption,
>either their own or that of heirs. The paper concludes that the simplest
>model that explains the relevant facts is one in which either consumers
>regard *the accumulation of wealth as an end in itself*, or unspent wealth
>yields a flow of services (such as power or social status) *which have the
>same practical effect on behavior as if wealth were intrinsically
>desirable*." {Emphasis added.}
>
>Circuits of capital, anyone?
>
>
>Gil Skillman
>
>PS--Karl Marx is not cited in the article, but that's probably just an
>oversight.
______________
I'm not sure what wealth means in the above quotation, and what
accumulation of wealth would be. Unless the meaning of wealth is clear, it
would be hard to establish its relation with Marx's circuit of capital.
In my opinion, both life cycle hypothesis as well as permanent income
hypothesis of consumption behavior are quite cultural and class
specific--mostly it represents American middle class behavior. Since they
are both macro models, it would be hard to refute them by just looking at a
small and admittedly scewed population.
For those who care: I won my appeal on Study Leave, and am off (next week)
to Cambridge University for three months! Cheers, ajit sinha
