DISCUSSION.

The simple Keynesian model involves the distinction between consumption and investment only. True, several alternative definitions of consumption are possible and have actually been used in models. But once the choice is made- for instance with respect to the treatment of housing expenditure-the data needed for this type of analysis are the respective time series derived from national income statistics. Not so in one of the models. Here, each category of expenditure contains both an endogenous and an exogenous component. In other words, a cross classification is involved: (1) by category of expenditure and (2) with respect to its dependence on current income. For each forecasting period the analyst will have to make a judgment as to the amount of exogenous expenditures involved. This might prove particularly difficult with respect to consumer expenditures. There are a number of hypotheses which might be offered to explain the effect of changes in the population. For example, it is possible that there is a different propensity to consume for different age groups, that the foreign born have a different propensity to consume than the native born, or that the marginal propensity to consume is a function of other characteristics such as education or occupation or urban versus rural location.