Post
Topic
Board Economics
Re: Were the Keynesians wrong?
by
dinofelis
on 25/01/2015, 17:28:18 UTC
Except we've never seen this case.  You are ignoring market psychology as determinant factor.  Things like sticky wages

Actually we do have seen this.  Computers !  Computers have been getting cheaper and cheaper the last 15 years.  According to Keynesian logic, nobody is going to buy computers, because next year you get not only a cheaper one, but also a more powerful one !

Turns out that the computer market is one in which the turn-over has been one of the highest.

We observe a similar behavior in cellular phones.  They get cheaper and cheaper (except for i-phones, which are transiting to a luxury item).  And the market explodes.

So no, lower prices in the future do not stop people from spending.