Here's the important bit:
"So what’s the paradox of toil? If you cut taxes on labor income, this expands labor supply — which puts downward pressure on wages and leads to expectations of deflation, which increases the real interest rate, which leads to lower output and employment."
Economics is more Dave's forte, but I do find it interesting that some of these highly academic hypothetical situations have actually come to pass.
No comments:
Post a Comment