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economic paradigm (B4)<br />A major principle central to a school of economics as it provides a fundamental analytical tool of economic theorizing. MARGINAL!SM and NEOCLASSICAL ECONOMICS, for example, have been able to demonstrate the powerful applications of the marginal concept backed up by calculus. In periods when there has been great dissatisfaction with the state of economics, a cry for a new paradigm has often heard: in the 1930s the concepts of KEYNES in his
relative income hypothesis (E2) Duesenberry's theory of the coNSU MPTION FUNcrroN that consumption is a function of current income relative to income in preceding time periods and relative to the income of households which are regarded as models to follow. The theory was used to reconcile a conflict between time series and cross-section evidence.<br /><em>Reference</em><br />Duesenberry, J. (1949) Income, Saving and the Theory of Consumer Behavior, Cambridge, MA: Harvard University Press.
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