As the economy begins to recover, the government has to decide on a stable medium-term investment and consumption policy. So far it has been focusing on reviving output. That approach may now have reached its limits.
There isn’t much more to be done, except by way of new investment. But, along with production and investment, consumption, too, needs to be revived. This is a much more difficult proposition, made all the more so by the absence of a theoretical underpinning or framework. All we have now is the plain vanilla Keynesianism of the “let them have money”. ...
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