The relevance of Duesenberry consumption theory: an applied case to Latin America


  • Jairo Parada Corrales Universidad del Norte
  • William Baca Mejía Universidad del Norte


Consumption theory, Duesenberry, Latin America


In this paper we examine the to-date relevance of Duesenberry´s Consumption Theory through an applied case to four economies in Latin America: Mexico, Brazil, Argentina and Colombia. Using annual time series of these countries we show that some empirical evidence of Duesenberry´s theory still holds and should not be discarded in modern macroeconomics as it has happened in regular macro text books in mainstream economics. Duesenberry´s theory includes important institutional factors that cannot be replaced by the permanent income hypothesis or the life cycle hypotheses. In the paper we explore different specifications of the consumption functions based on the relevant literature. Final conclusions are presented.

Author Biographies

Jairo Parada Corrales, Universidad del Norte

PhD. Professor Department of Economics, IEEC, Universidad del Norte(Colombia).

William Baca Mejía, Universidad del Norte

Instructor, Department of Economics, IEEC, Universidad del Norte(Colombsia). PhD Student-Department of Economics-University ofMissouri-Kansas City.





Science article