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Not really. They used this term in the housing crisis, in reference to stabilizing home prices. They recognized that home equity loans were driving a lot of s
by q1w2 5y ago
Not really. They used this term in the housing crisis, in reference to stabilizing home prices. They recognized that home equity loans were driving a lot of spending AT THAT TIME. It's not some general core principle.
Also, the stimulus checks are also a "wealth effect" mechanism, but no one would confuse that for "trickle down".
The title makes a false comparison.
- esja 5y agoThat’s not the case. All the central banks and the BIS understand and use this terminology when discussing the relationship of asset prices to demand, and it’s not at all specific to the USA or even a specific time period or specific market in the USA. Also, the stimulus checks are a fiscal measure and have absolutely nothing to do with the wealth effect induced by loose monetary policy.