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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (153354)	10/15/2002 4:19:35 PM
From: Joe NYC	Respond to of 1585218

Dan, We were in major liquidity trap in late 80s to 91. I am not sure it is that serious this time. But I was wondering what your reaction was to my idea that if the money is not spent by one group, say high income individuals, it is invested, and this investment just turns into some kind of spending later on anyway. There may be holes in this, I just thought of it last night. I think what makes the difference is the kind of consumption that takes place. There was an Austrian economist (who's name escapes me) who came up with theory of different "order" of goods, such as low order and high order. Low order being say a farm product, higher order being goods that help make other goods and so on. I guess you can call some of these capital goods. So it may be that the money that is spent through "investments" have a higher probability of being higher order goods. And for the economy to grow, it needs to become more and more productive, which can be encouraged by these high order goods and services. Joe