Further we will consider the factor called by a wealth effect (or effect of the real cash remains). Action of this factor is connected with purchasing power of money. Increase of price level leads to decrease in purchasing power of money, i.e. for the same sum the consumer buys smaller real output that leads to decrease in real GNP. Lowering of the level of the prices respectively leads to increase in cumulative demand.
And the last tsenovy factor - effect of import purchases. Here the ratio between the level of prices for import goods and level of prices for a domestic production is considered. Three options of this ratio are possible.
Distinctions between Keynesian and neoclassical functions of autonomous investments result from distinctions of r and R*. Limit productivity of the capital (r) characterizes the used production technology and in this sense is objective parameter. Marginal efficiency of the capital - category subjective. Though at preset values Pi and K0 in a formula (value R * is defined unambiguously, but Pi values are estimated sizes; they are based on expectations of the investor of rather future prices, expenses and volumes of demand. Therefore at external similarity of both considered functions in the Keynesian concept when scoping investments pessimism or optimism of the investor (value of an indicator of R *), and in neoclassical models is at this equipment decisive factor - a rate of percent (i). In other words Keynesian function of investments has smaller elasticity at the percent rate, than neoclassical function of investments.
When at a full load of the capacities used with the maximum intensity demand for the benefits increases, at the beginning additional production can be made due to more intensive operation of the operative equipment. But if the increased demand remains for a long time, in interests of businessmen to increase capacities for production of additional production with the smallest expenses.
The volume of demand of house farms for import goods is defined by the same factors that the volume of demand for the domestic benefits. Therefore Keynesian function of import has Z(y) appearance = Zyy where Zy - the limit tendency to consumption of the import benefits showing as far as units will increase demand for import at increase in the located income at unit.
This hypothesis has the shortcomings. First, in the short-term period this function of consumption is described only during the falling of production and reduction of the located income, without considering possible growth of economy. Secondly, this theory does not consider cases of long recession in the located income.
At the same time calculations for the actual data which were carried out for more long periods do not show decrease in average norm of consumption. So, S. Kuznets received the following results on the USA:
Respectively the total amount of investments shares on renovative and pure investments. If in some period the total amount of investment is less than a size of depreciation of the capital (depreciation), pure investments appear negative size.
Economists of classical school and modern neoclassics use essentially other methodological approach at creation of function of consumption. In the concept of classical school the income is endogenous parameter for house farms. The economic subject himself defines what will be the size of its income, by distribution of calendar time on working and free, proceeding from criterion of maximizing usefulness.
Because the category of cumulative demand is one of the most important problems of macroeconomic, it is lit in any grant devoted to the macroeconomic analysis. It was a small problem for us as it was necessary to touch a lot of literature in order that as it is possible to tell more stoutly and more well about cumulative demand. Eventually we chose the main grant Galperin's textbook "Macroeconomic" for availability and logicality of a statement of material, as addition having considered some more sources.
From this it follows that production expansion potentially comprises possibility of overproduction as reduction of average norm of consumption means that the lesser part of the made production is consumed by households.