ABSTRACT
As fundamental as the concept of a consumption function may be to the argument made in The General Theory, the way John Maynard Keynes chose to model the behavior of the household sector needs to be significantly modified if the analysis is to be compatible with the rest of post-Keynesian theory. To extend to the long period the arguments about consumption first made by Keynes, it will be necessary to develop a quite different model of household behavior from that traditionally relied upon by economists. The household may, of course, consist of only a single individual, just as a business firm may consist of only a single worker, the owner-entrepreneur. Besides recognizing that the effective decision-making unit is a social organization rather than just an individual person and that the household’s nonroutine, or discretionary, expenditures need to be distinguished from its regularly budgeted outlays, several further modifications will be made in the usual way of modeling household behavior.
