Keynes-Clower-Wu Income Growth Theory provides a consumption theory, combining theory and empirical evidence. In contrast, neoclassical economists cannot easily explain short and long term behavior, such as overconsumption and dissaving. Or why one country has households saving much more than others can just a few years later start saving less, and vice versa. This inability to explain personal saving in data reflects the need for a better consumption theory. With the analysis of employment and labor income growth, it is possible to show that changes in savings are the direct consequence of forecasting error of future income and the resulting "optimal" consumption. And, only based on income growth theory, we can explain in theory and data the effect of trade on saving, and the outcome (15/17 or 88% from 1960 to 2024) of U.S. presidential elections with a single variable.

The following chart will show some of the issues we will discuss: