Underconsumption Theory

Discipline: Economics

Analysis of how total output fails to be sold at the cost of production plus normal profit. Such insufficient consumption within a depressed economy aggravates the economic decline of the state.

A further theory suggests that when there is inadequate buying power in an economy, the government should give periodic injections of money to consumers.

Also see: secular stagnation theory

Source:
G Harberler, Prosperity and Depression (Geneva, 1937)

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