James Duesenberry (1918–2009)

This chapter provides an overview of the various contributions of James Duesenberry (1918–2009) to economics in relation to understanding the psychology of consumer behaviour, the relative income hypothesis, the demonstration effect, business cycles, monetary policy, and the Brookings Social Science Research Council (SSRC) econometric model. In particular, it traces the particular psychological approach that Duesenberry employed, for example in relation to understanding the social significance of consumption, the interdependence of consumer preferences, and the average rate of saving. It then examines Duesenberry’s contingent and historical approach to understanding the progression of business cycles and his work on the mechanics of inflation. Finally, it briefly discusses his influential work on monetary policy and on the construction of a large-scale econometric model of the US economy.