Thursday, August 12, 2010

Sentences to Memorize and Adopt

"I am neither a supply-side economist nor a demand-side economist," I said.  "I am a supply-and-demand economist."

Mankiw points out that, even in a deep demand-side recession like this one has become, employment still responds to supply-side forces - in this case, the addition of several million teenagers looking for summer employment, some of whom find work. Given that the highest unemployment is among the uneducated and unskilled, you would think that there are no jobs out there for these teens. But they found them. Supply matters. Demand matters. See Sumner (one, two, my summary) also.

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