Knowledge that Transforms

CONSURlPTIONT H E fact that consumption outlay of indi- viduals as well as of groups of individuals depends on their income is well known.Although this statement will hardly be doubted, it may be tested statistically from family budget statistics, as has been done by various investigators.These statistics can show only that consumption outlay by different people, having different incomes a t the same moment, depends on income.Consumption outlay by the same family in different years, showing varying income, will not necessarily depend on income in the same way that is shown-by family budget statistics.This latter relation plays a highly important r61e in the causation of business cycles, a fact perhaps most stressed by Rlr.Keynes, who created the term "propensity to consume" and who used this notion in various deductions.The importance of the propensity to consume for the quantitative approximation of some business-cycle problems has led a number of authors to measurements of that coefficient.How large the propensity to consume may be is not the only important question.Another question is "What lag exists between income changes and changes in consumption outlay?"Tke longer this lag, the more slowly will the economic system react to changes in income and the longer, other things being equal, will be the process of adjustment (e.g., a business cycle).The answer to this question -put by Mrs. Gilboy in this REVIEW -cannot be given by family budyet data, as already stated.The only pos~ible method of securing an answer is by use of t i ~n e series.The use of time series, however, a1wzj.simplies the difficulty that a number of cctcris pasibus clauses are no longer fulfilled.S o t only changes in income are the causes of any given changes in consumption outlay; other

VOLUME 1 Introduction D. Collard Principles and Methods of Industrial Peace, 1905, 260pp Economic Science in Relation to Practice, 1908, 32pp VOLUME 2 Wealth and Welfare, 1912, 524pp VOLUME 3 Economics of Welfare [1920] 1932 4th ed., 868pp VOLUME 4 Unemployment, 1914, 258pp The Political Economy of War, [1921] 2nd ed., 1940, 176pp VOLUME 5 Essays in Applied Economics, 1923, 205pp VOLUME 6 Industrial Fluctuations, [1927] 2nd ed., 1929, 447pp VOLUME 7 A Study in Public Finance, [1928] 3rd ed., 1947, 303pp VOLUME 8 The Theory of Unemployment, 1933, 344pp VOLUME 9 The Economics of Stationary States, 1935, 337pp VOLUME 10 Employment and Equilibrium, [1941] 2nd ed., 1949, 293pp VOLUME 11 Income: An Introduction to Economics, 1946, 125pp Income Revisited, 1955, 94pp VOLUME 12 Aspects of British Economic History 1918-1925, 1947, 259pp VOLUME 13 Keynes General Theory, 1950, 77pp Alfred Marshall and Current Thought, 1953, 92pp VOLUME 14 Essays in Economics, 1952, 247pp

Journal Article The Quantitative Aspect of the British Population Problem—A Survey Get access E. Grebenik E. Grebenik London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 10, Issue 1, Winter 1942, Pages 43–52, https://doi.org/10.2307/2967494 Published: 01 December 1942