On Transmission Mechanism from Social Security to Consumption Using First Order Difference Function

Social Security plays an important role in "social power systems" as well as in "social stability system". This paper selected the two variables of social security and the consumption, made analysis using the tool of first-order differential equation. By model analysis, we have concluded that (1) different levels of social security will affect inhabitant expected income, further to change the consumption level. Under the constant external conditions, the expected income increase, the consumption level will be promoted more. If the social security reduced, it will reduce the expected income, further lower the people\´s consumption levels. (2) the different models have varied effects. If the reaction coefficient is between 0 and 2, social security model is most stable and can maintain the level of consumption in a good level. If the reaction coefficient out the range 0-2, it will lead the social security-consumption model into instable state. And the instability, both increase and decrease out the range 0-2, will increase the difficulty of promoting consumption level.