About Quote by Myron Scholes
“Keynesian modelling relies on marginal propensity to consume and marginal propensity to invest. The idea that if we give more money to the poor, they have a propensity to consume that's much higher than the wealthy, though I wish they would talk to my wife about that; she seems to have a propensity to consume.”
About This Quote
Source Lecture: Economic Theory, 2020
Higher marginal propensity to consume among low‑income households suggests stimulus may boost demand, but individual habits vary.
In simple terms: Poor spend more of extra money than rich.
Key Takeaway
Target aid to those likely to spend it.
Themes
economics
policy
inequality
Mood
analytical
critical
Type
economic
policy
When to use this quote
- government aid
- household budgeting
- economic forecasting
Key Concepts
marginal propensity
stimulus effectiveness
Questions to Reflect On
- Will stimulus always translate to economic growth?
- How do personal preferences affect policy outcomes?
A Different Perspective
Assumes uniform behavior within income groups.
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