3 ms·
It works to the extent there's slack in the economy. Circulating money is just a tool to allocate real resources (materials, people, manufacturing capacity, etc
by notJim 7y ago
It works to the extent there's slack in the economy. Circulating money is just a tool to allocate real resources (materials, people, manufacturing capacity, etc.) If the resources are under-allocated (i.e., high unemployment), then circulating more money can fix that problem.