Even if part of this decline was driven by a heightened liquidity premium the implication is the same: it indicates an increased demand for highly liquid and safe assets which, in turn, implies less
aggregate nominal spending.
Not exact matches
You see, according to these «economic theorists», when the unemployed and / or lower - income populace receive various types of funds from the government, they
spend these funds, thus increasing
nominal aggregate spending in the economy.
Under another special circumstance (other than an increase in velocity of money) transfer payments can result in a net increase in
nominal aggregate spending.
The result is no net increase in
nominal aggregate spending.
If, in fact, an increase in the minimum wage were to result in a net increase in
nominal aggregate spending, then we could eliminate any shortfall in
aggregate demand relative to
aggregate supply by merely boosting the minimum wage to whatever level necessary to eliminate the gap.
I have also heard cable news economic theorists argue that an increase in the minimum wage would result in a net increase in
nominal aggregate spending.
The nomenclature is a tip off that transfer payments do not, except under special circumstances, result in a net increase in
nominal aggregate spending in the economy.