According to Hall, Consumption Spending Follows a Random Walk

question 98

Essay

According to Hall, consumption spending follows a random walk.
a.What determines changes in consumption in this case?
b.What is the implication of following a random walk for predicting changes in consumption?

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Definitions:

Deprivation Motivation

A drive that emerges from a lack of critical psychological or physical needs, leading to behaviors aimed at fulfilling those deficits.

Persistent Motive

A long-standing desire or drive that consistently influences behavior over time.

Humanistic Psychology

Humanistic psychology is a psychological perspective that emphasizes the individual's potential and stresses the importance of growth and self-actualization.

Motivation Psychology

A field of psychology that studies what drives individuals to initiate, direct, and sustain behaviors and actions towards achieving specific goals.