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Demand-siders have insisted that we all need to start spending more money to kick the economy into gear. Broadly, the only tool to do this is to "print money";
by bildung 12y ago
Demand-siders have insisted that we all need to start spending more money to kick the economy into gear. Broadly, the only tool to do this is to "print money"; read: lower interest rates, twiddle with the reserve ratio requirement, directly pay off banks for certain types of activities.
As I have understood demand-side economics, one additional difference to supply-side views is the source of the demand: demand-siders do not only see business investments as the source of demand, but also private consumption. To support that, wages have to rise (as is happening in China). I think that partly explains the currently active basic income discourse in Europe and the US and the introduction of minimum wage in Germany (done by a coalition of center and right parties!). Both instruments would directly benefit the poorer half of the population, who has a low to non-existant savings ratio (in Germany the "poorer" 60% of the population hold only 3% of the privately-held wealth). Increasing wages for these classes would immediately result in more demand.