Keynes-Clower-Wu's Income Growth Theory provides a new consumption theory result, combining theory and empirical evidence. In contrast, previous Nobel prize economists in this subject, '85 Modigliani, '76 Milton Friedman (1957), '95 Robert Lucas, '15 Angus Deaton, and '26 Robert Hall (1978), have failed to provide a scientific theory on short and long-term consumption behavior, most importantly overconsumption and dissaving. In addition, their work failed to explain why households in a higher saving country can suddenly start saving less, creating a yo-yo effect, and vice versa. Fundamentally, the inability to explain personal saving in data reflects the need for a better consumption theory. With the analysis of factors affecting 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. In practice, based on Income Growth Theory, there is a way to understand the relationship between the effects of trade and saving, and, from 1960 to 2024, the outcome of the U.S. presidential election in 14 out of 16 (87.5%) times, showing a high correlation between a single economic variable, farm income, and the election result.

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