Keynesian economists tend to focus on stimulating spending, as Keynes’s central argument was that consumer spending generally lags, causing aggregate demand to be depressed. Most economists nowadays believe that this is wrong, and that spending is the effect rather than the cause of economic growth. Hiwa Alaghebandian of the American Enterprise Institute explains:
One would think that the events of the last decade have refuted Keynes once and for all. If stimulating consumer spending were the key to prosperity, we should all be in clover.
- Subscribe now!... Get rid of ADs!Support Power Line...VIP MembershipPresentsPower Line
Most Read on Power Line
Subscribe to Power Line by Email
Find us on Facebook
“Arise and take our stand for freedom as in the olden time.” Winston Churchill
“Proclaim Liberty throughout All the land unto All the Inhabitants Thereof.” Inscription on the Liberty Bell