... there cannot be a buyer without a seller or a seller without a buyer. Though an individual whose transactions are small in relation to the market can safely neglect the fact that demand is not a one-sided transaction, it makes nonsense to neglect it when we come to aggregate demand. This is the vital difference between the theory of the economic behaviour of the aggregate and the theory of the behaviour of the individual unit, in which we assume that changes in the individual’s own demand do not affect his income.Reminds me of Milton Friedman's strawberries.
Wednesday, March 28, 2018
JMK TGT CH7 END
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1 comment:
It is a hard sell to accept the "Paradox Of Thrift" by individuals who are "saving their way to prosperity".
Of course JMK would have had issues I think with the level of private debt we have today.
I doubt even he would not have imagined the extent of financial engineering we have and the amount of leveraged spending we have consumed from future income flows.
Sort of makes the lesson of "Paradox Of Thrift" very relevant in the current state of affairs.
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