saw another econ prof on yt do that flawless demand curve flow and it made me so goddamn uneasy like yeah math can explain price fluctuations but the
why does the leffer curve outperform the keynesian multiplier when aiming for low inflation during a downturn?
tbh supply side vs keynes: quick look rn
- leffer curve: tax cut or hike ➤ boost production ➤ larger output swing but can dampen inflation if capacity slack big
- keynesian multiplier: govt spend ➤ demand jumps ➤ up output, risk more price pressure when base is already warm
- numbers: a .2‑point drop in effective top‑rate in 1980s fed us 7‑10% GDP jump for < 1.5% inflation hike in low‑idle environment
- context: laffer shines where supply bottlenecks high (oil shock, post‑COVID). multiplier wins in a near‑potential‑boom scenario
- policy record: early‑80s US and 2019 UK furlough fund show divergent price outcomes; leffer gave more stable output post‑shock
any body got DSGE output or run actual policy test? throw link; your experience decides who wins this spat
bottom line: it isn’t simple—it’s slack + timing, not a pure formula
let's hear who actually gets the inflation upside: supply‑oriented or spending‑oriented?
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