Underconsumption


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Underconsumption

The reduction of demand by consumers. That is, underconsumption is the desire of consumers to buy fewer goods. Some early Keynesian thinkers believed that underconsumption causes recessions or stagnation, but most now argue that aggregate demand consists of more than consumption. Classical and Austrian School economists reject the notion that underconsumption is harmful.
References in periodicals archive ?
For there is not only underconsumption, but also overconsumption; not only too little, but also too much.
Simpson criticizes major alternative business-cycle theories such as underconsumption and overproduction, Keynesian business-cycle theory, and real business-cycle theory.
A substantial number of people are considered to be malnourished, either through overconsumption of foods that should be consumed in moderation (foods deficient in vitamins, nutrients, and fibre [3]) or through underconsumption of nutritious food [4].
German working class organizations have accepted a corporatist deal with business in order to hold onto jobs in Germany, but this has resulted in a sluggish expansion of the internal German market, with productivity growth outpacing production growth, hence, the typical underconsumption configuration.
There are Marxian and Keynesian versions of overproduction and underconsumption, with Marx postulating deficiency in income and Keynes citing deficiencies in investment as the root cause of downturn or crisis.
It was from his theory of cooperation that Hobson developed his theory of underconsumption which has been his chief contribution to economic theory and was to have a major influence on Keynes.
As a result of textbooks' misrepresentation the Great Depression's causes, generations of the working and voting public have been taught that a world-changing economic event was largely due to an inherently unstable market system characterized by unequal distribution of wealth, underconsumption, overproduction, and speculation, and that the solution resided in an activist government manifested by the New Deal policies of the 1930s.
Not eating enough: Overcoming underconsumption of military operational rations (pp.
In his article "The Global Economic Crisis: A View from the South," Prabhat Patnaik identifies and analyzes the particularities of the current phase of capitalist globalization, including the unprecedented formation of a single global reserve labour army and a tendency towards underconsumption, which nation-states can no longer counteract effectively through demand management due to the rule of finance capital.
In this context, underconsumption becomes a fundamental explanation of the crisis (relegating neomercantilism to second place) and a principal cause of the profound and growing unnatural external imbalances (independent of investment spending) that have resulted from economic policy distortions or the institutional frameworks that constrain or govern commercial flows.
The reduction in consumption that comes with the excess demand for money makes it tempting to view the problem as underconsumption and to try to cure it by using fiscal policy to stimulate that consumption.
Deposits and Guarantees required: Underconsumption penalty In the case of temporary contractual minimum volume point (II.