Archive for July 8th, 2009
Wednesday, 8 July 2009 by dbhalling in Economics, Innovation • 10 Comments
Traditional Explanation of Economic Growth
What causes economic growth? One of the common explanations is consumer spending. As a headline on Minnesota Public Radio’s website in October 30, 2008 stated “Consumer Spending Accounts for Two-Thirds of U.S. Economy.” If consumer spending is such a big part of the economy, then all that is necessary to stimulate economic growth is to get consumers spending more. The other one-third of the U.S. economy is government spending, so perhaps by having the government spend more money we can stimulate the economy. The theory of spending causing economic growth is commonly associated with Keynesian economics.
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