4 ms·
Very interesting stuff, but I'm always very skeptical of claims along the lines of "Every x dollars spent on [good/service] generates y additional [jobs/dollars
by lucasjung 16y ago
Very interesting stuff, but I'm always very skeptical of claims along the lines of "Every x dollars spent on [good/service] generates y additional [jobs/dollars/other good stuff]." First, I'm highly dubious of the ability of economists to isolate such complex relationships down to single-single input, single-output relationships. More importantly, there's never any analysis of opportunity costs to provide context: what if that same money, spent on something else, provided an even bigger economic benefit?
- seiji 16y agoCheck out multipliers: http://en.wikipedia.org/wiki/Multiplier_(economics) http://en.wikipedia.org/wiki/Multiplier_(economics)
- Schultzy 16y agoI agree with lucas, but more because of the faulty Keynesian economics described in that article. Innovation and productive activity "generates" money, not consumption. It doesn't make any sense to say that if I purchase something off of the McDonald's Dollar Menu, I have somehow generated and additional $2.08.
- seiji 16y agoShaffer's rounds of spending chapter explains it better than the wikipedia article: http://www.rri.wvu.edu/WebBook/Schaffer/chap05.html http://www.rri.wvu.edu/WebBook/Schaffer/chap05.html (not sure why I jumped to wikipedia first).