1/5
Supply-side economics and trickle-down theory: "“We must guarantee economic growth of above 5% this year. If economic growth revives, companies will have money and people will have jobs and incomes."
reuters.com
Supply-side economics and trickle-down theory: "“We must guarantee economic growth of above 5% this year. If economic growth revives, companies will have money and people will have jobs and incomes."
reuters.com
2/5
Trickle-down worked powerfully in the 1990s and 2000s, when China's severe underinvestment left it with a great deal of pent-up demand that could be productively satisfied with supply-side support to the economy.
Trickle-down worked powerfully in the 1990s and 2000s, when China's severe underinvestment left it with a great deal of pent-up demand that could be productively satisfied with supply-side support to the economy.
3/5
But in the past fifteen years the demand needed to balance continued supply-side support has required both soaring debt and soaring trade surpluses.
But in the past fifteen years the demand needed to balance continued supply-side support has required both soaring debt and soaring trade surpluses.
4/5
The good news is that by now most prominent economists and economic policy advisor seem to understand that only a switch from supply-side support to demand-side support can sustain growth.
The good news is that by now most prominent economists and economic policy advisor seem to understand that only a switch from supply-side support to demand-side support can sustain growth.
5/5
The bad news is that they don't seem to recognize the associated near-term costs of doing so, and how powerful the institutional constraints that prevent this shift are likely to be.
The bad news is that they don't seem to recognize the associated near-term costs of doing so, and how powerful the institutional constraints that prevent this shift are likely to be.
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