If someone gave you $10 right now, what would you do with it?

I asked before, "How will you do it if someone hands you $ 10 now? Would you decide to use it at once or hide it or hide it or is it a combination of two?" We will clarify the edge consumption trend. But why do people tend to consume different marginal tendencies? The way that economists have long considered this concept through "permanent income hypothesis". This is the point raised by Milton Friedman, an economist at the famous University of Chicago. The hypothesis states that personal consumption has a low dependence on today's income (short-term income) and low dependence on lifetime income (permanent income).

But as Economic Columnist Noah Smith wrote, some empirical studies show that there are several major flaws in this assumption. It is therefore worth considering how this assumption and inequality, especially inequality of wealth, will affect consumption.

Permanent revenue assumption is that if you pay 10 dollars now, whether you use it today depends on your income today (probably only $ 10), and how much for all processes It depends on whether to use. Your life I hope that ten dollars are falling compared to your lifetime income, so you will never spend too much extra money. But as Smith points out, there are many studies that show people use lots of surprising money when they receive them. So, what happened here?

The answer lies in who spends the most money. There is a well-known change in the trend of marginal consumption. People with low net assets tend to have a marginal propensity to consume, and as individuals' net assets increase these trends decline. More specifically, research points out the importance of current assets or assets that people can easily acquire. Studies suggest that people who consume a large amount of new income may not be so affluent

Perhaps these less wealthy people have less access to credit and can not borrow money to fund their consumption. In any case, if people with low liquid assets can get cash quickly, this is important for fiscal policy. They want to invest money to those who have little or no current assets if they want to ensure that policy makers quickly run out of the funds for the economic recession. These people actually spend money, increase consumption, and help resume economic growth.

Imagine someone is approaching you now and giving you a check of one billion dollars. It will change your life, do not you? It will adjust your priority. You will always come up with all the material situation of you. Please try to incorporate yourself in this way of thinking. Your situation will change but yourself will not change. You still look the same way. You still have the same growth experience. Your way of thinking still works the same way. You still have that damn toothache

Who needs to join? Sometimes you want something, why and why it is obvious now, you need someone's specific skills to achieve. You may not have it now. What is the cost of separating him from what he is already doing? Or are you going to find someone else who has this skill? Is there anything worth it now? How long will it take to see if it really deserves it? If you can succeed quickly (or failing), it is usually worth it. But sometimes it can take several months to see the results. If we do not know for a long time, is it worth it? What can we do to shorten the time we know?

I asked before, "How will you do it if someone hands you $ 10 now? Would you decide to use it at once or hide it or hide it or is it a combination of two?" We will clarify the edge consumption trend. But why do people tend to consume different marginal tendencies? The way that economists have long considered this concept through "permanent income hypothesis". This is the point raised by Milton Friedman, an economist at the famous University of Chicago. The hypothesis states that personal consumption has a low dependence on today's income (short-term income) and low dependence on lifetime income (permanent income).

Permanent revenue assumption is that if you pay 10 dollars now, whether you use it today depends on your income today (probably only $ 10), and how much for all processes It depends on whether to use. Your life I hope that ten dollars are falling compared to your lifetime income, so you will never spend too much extra money. But as Smith points out, there are many studies that show people use lots of surprising money when they receive them. So, what happened here?