Attali crise
J. Attali explains in the first article that governments should strongly stimulate consumption and investment to respond to the crisis. I will try to explain J. Attali’s position by illustrating those two economic concepts (consumption and investment).
As Keynes’ consumption equation states (C = a Y + b, with Y = revenue), households’ consumption depends on their current revenue. By decreasing the revenue, the rising of the unemployment rate leads to a decrease in consumption. However, other reasons can explain this decrease. Indeed, households’ choice between consuming and saving depends on the amount of their current revenue but also on their future revenue (M. Friedman, A. Modigliani). Thus the pessimistic economic forecasts and the decrease of households’ confidence lead households to increase their savings by reducing their consumption. The decrease of the households’ consumption can also be explained by their impoverishment: Modigliani’s consumption equation (C = a (W/P) + b Y with W = wealth and P = prices) takes into account the wealth of households. The collapse of the stock exchange and the real estate market lead to a