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We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. It could go into luxury i
by jganetsk 13y ago
We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. It could go into luxury items (which the poor love to buy). Also, proposals for basic income often involve curtailing other social programs, which would have an impact as well. A basic income could, for instance, supplant food stamps, thus potentially keeping food prices the same.
- dragonwriter 13y ago> We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. Its not like marginal propensity to consume of people in different income levels is a completely opaque mystery about which we have no information.
- jganetsk 13y agoBut there are many other factors other than people's propensity to consume that you need to account for. And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much.
- dragonwriter 13y ago> But there are many other factors other than people's propensity to consume that you need to account for. Not to determine short-term demand effects of redistribution of income there isn't. > And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much. Probably not, but since marginal propensity to consume is the amount of the next dollar of income that will go to consumption, that means that the consumption effects are fairly straightforward if you have an idea of marginal propensity to consume.