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Math Help - derivation of savings function

  1. #1
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    derivation of savings function

    Hi,can someone please help me with this consumption function. I need to derive savings function from it.

    C=C0+cTr+c(1-t)Y

    C0-autonomous consumption
    c - marginal propensity to consume
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  2. #2
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    Quote Originally Posted by aldza88 View Post
    Hi,can someone please help me with this consumption function. I need to derive savings function from it.

    C=C0+cTr+c(1-t)Y

    C0-autonomous consumption
    c - marginal propensity to consume
    What does the savings function look like?
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  3. #3
    Newbie Tom G's Avatar
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    Quote Originally Posted by aldza88 View Post
    Hi,can someone please help me with this consumption function. I need to derive savings function from it.

    C=C0+cTr+c(1-t)Y

    C0-autonomous consumption
    c - marginal propensity to consume
    I can't work this out now, as I've got an economic maths test soon, but this might help:
    The marginal propensity to consume and the marginal propensity to save(s) sum to 1, hence: s=1-c So I'd be inclined to start with that and go from there.

    Also what, if any assumptions have been made? Could you also define T and t please? I presume r is the rate of interest?
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