Thursday, May 16, 2013

McConnell discredited?


Two excerpts from Malcolm R. McConnell's 1975 textbook, and a contradiction I let slide in yesterday's post:

First, from the text above McConnell's Figure 11•2:

Many economists now feel that the MPC and MPS for the economy as a whole are relatively constant. Statistical data such as those of Figure 11•2 are consistent with this position.

In other words, statistical data supports the view that the MPC does NOT change.

Second, from the text below Mcconnell's Figure 11•2:

[The figure] suggests that households spend a larger portion of a small income than they do of a large income.

In other words, statistical data supports the view that the MPC *DOES* change.

Wow. Talk about seeing both sides of an issue!

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