Russ Roberts on Aggregate Demand

Saying that poor sales is the biggest problem facing small business is like saying that the biggest problem facing the economy is that it’s not doing very well. It has no content. It tells you nothing about an amorphous concept called “aggregate demand”

This is obviously a long conversation, but I take the doubt on this seriously. At least one important component of the concept of aggregate demand is the fact that lots of markets seem to expand or contract at the same time.

Here is just one brick in the wall, industrial produciton on a variety of products types moving together.

FRED Graph

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