E VER since the General Theory, continued experimentation with various sets of independent variables has produced numerous consumption functions. The bulk of this work was completed during or immediately following World War II, and therefore little of it has been tested with respect to the postwar period. Some may object to the use of the postwar years for testing purposes, on the grounds that the economic system had not returned to normal conditions, especially in the sphere of consumers' expenditures, owing to the existence of the deferred demand which had grown to immense proportions as the result of five years of war production. But, as we are now engaged in a staggering rearmament program coupled with a foreign war, these immediate postwar years of I946-50 appear as close an approach to the normal period as may legitimately be expected in the near future. Thus, it seems opportune to take stock of some of the existing contributions to see if we may find a consumption function suitable for use as a tool for prediction. The functions which we shall endeavor to test for the postwar period fall into three groups.

Most of us will agree, however, that rapid inflation in any country does serious economic harm by making routine saving highly unprofitable to the saver, by distorting the allocation of investment, by creating a privately profitable but socially wasteful area of activity for middlemen of various species, and in other ways.--Jacob Viner. Continuous galloping inflation is found in some underdeveloped countries; Chile is perhaps the most extreme example. There can be no doubt that it retards growth (through lowering the allocative efficiency of the economy and discouraging savings) even if acute depressive reactions can be avoided.--Gottfried Haberler. The gross national product of Chile may well be a fifth to a fourth below what one would expect from the fine collection of resources at its disposal were it not for its chronic inflation and malallocations in resources that have occurred as a consequence of the direct controls that Chile has employed.--Theodore W. Schultz.