Demand-side economics is a term used to describe the position that economic growth and full employment are most effectively created by high demand for products and services.[1] According to demand-side economics, output is determined by effective demand. High consumer spending leads to business expansion, resulting in greater employment opportunities. Higher levels of employment create a multiplier effect[2] that further stimulates aggregate demand, leading to greater economic growth.[3]
Proponents of demand-side economics argue that tax breaks for the wealthy produce little, if any, economic benefit because most of the additional money is not spent on goods or services but is reinvested in an economy with low demand (which makes speculative bubbles likely). Instead, they argue increased governmental spending will help to grow the economy by spurring additional employment opportunities.[4] They cite the lessons of the Great Depression of the 1930s as evidence that increased governmental spending spurs growth.[5]
Demand-side economics traces its origins to British economist John Maynard Keynes. He argued there is no automatic stabilizing mechanism built into an economy, and that as a result state intervention is necessary to maintain output.[6]
^Kalecki, Michael (1943). "Political Aspects of Full Employment". Political Quarterly. 14 (4): 322–331. doi:10.1111/j.1467-923X.1943.tb01016.x.
^Kahn, R. F. (1931). "The Relation of Home Invest to Unemployment". Economic Journal. 41 (162): 1730–0198. doi:10.2307/2223697. JSTOR 2223697. Retrieved 30 January 2019.
^Liu, Eric; Hanauer, Nick (2011). The Gardens of Democracy. Seattle, WA: Sasquatch Books. p. 11. ISBN978-1-57061-823-9.
^McEachern, William (2009). Economics: A Contemporary Introduction (Eighth ed.). Mason, OH: Southwest Cengage Learning. p. 430. ISBN978-0-324-57921-5.
^Eggertsson, Gauti. "Great Expectations and the End of the Depression" (PDF). newyorkfed.org. Federal Reserve Bank of New York Staff Reports. Retrieved 25 November 2019.
^Keynes, J. M. "A Monetary Theory of Production". The History of Economic Thought. Institute for New Economic Thinking. Retrieved 30 January 2019.
March 06, 2023
demand, side, economics, term, used, describe, position, that, economic, growth, full, employment, most, effectively, created, high, demand, products, services, according, demand, side, economics, output, determined, effective, demand, high, consumer, spending. Demand side economics is a term used to describe the position that economic growth and full employment are most effectively created by high demand for products and services 1 According to demand side economics output is determined by effective demand High consumer spending leads to business expansion resulting in greater employment opportunities Higher levels of employment create a multiplier effect 2 that further stimulates aggregate demand leading to greater economic growth 3 Proponents of demand side economics argue that tax breaks for the wealthy produce little if any economic benefit because most of the additional money is not spent on goods or services but is reinvested in an economy with low demand which makes speculative bubbles likely Instead they argue increased governmental spending will help to grow the economy by spurring additional employment opportunities 4 They cite the lessons of the Great Depression of the 1930s as evidence that increased governmental spending spurs growth 5 Demand side economics traces its origins to British economist John Maynard Keynes He argued there is no automatic stabilizing mechanism built into an economy and that as a result state intervention is necessary to maintain output 6 See also EditFiscal policy Keynesian economics New Deal Obamanomics Public works Supply side economics Trickle up effect Universal Basic IncomeReferences Edit Kalecki Michael 1943 Political Aspects of Full Employment Political Quarterly 14 4 322 331 doi 10 1111 j 1467 923X 1943 tb01016 x Kahn R F 1931 The Relation of Home Invest to Unemployment Economic Journal 41 162 1730 0198 doi 10 2307 2223697 JSTOR 2223697 Retrieved 30 January 2019 Liu Eric Hanauer Nick 2011 The Gardens of Democracy Seattle WA Sasquatch Books p 11 ISBN 978 1 57061 823 9 McEachern William 2009 Economics A Contemporary Introduction Eighth ed Mason OH Southwest Cengage Learning p 430 ISBN 978 0 324 57921 5 Eggertsson Gauti Great Expectations and the End of the Depression PDF newyorkfed org Federal Reserve Bank of New York Staff Reports Retrieved 25 November 2019 Keynes J M A Monetary Theory of Production The History of Economic Thought Institute for New Economic Thinking Retrieved 30 January 2019 Retrieved from https en wikipedia org w index php title Demand side economics amp oldid 1116226994, wikipedia, wiki, book, books, library,
