Abstract
The old theory of macroeconomics, which have been taught more than a half century is that if spending increases, then production increases; thus, workers are hired and their income increases. In summary, an increase in spending is equal to an increase in income: this process of an increase in spending and an increase in income, which, in turn, increase the spending-the increase in spending is less than an increase in income based on the fact that MPC is less than one- is repeated until its effect disappears.
The new theory, which Paul Kim is presenting today is that an increase in spending does not generate income in equal amount, because workers are not hired even if spending increases. Even there is a need to hire new worker (and 2 CEO orders to hire new workers in massive scale in high paying jobs), new workers are not hired in high paying jobs because hiring managers are unwilling to hire new workers in massive scale, although they might be pretending to hire new workers.
Recommended Citation
Kim, Paul, "New and Old in New Macroeconomics" (2019). Economics Papers and Presentations. 15.
https://scholarspace.jccc.edu/econpapers/15