Yet another Eitan's blog

יום שני, פברואר 12, 2007

How come I didn't know about Keynesian multiplier before???

Just found out how powerful is Keynesian multiplier in economics... Let's say the government spends a 100$ on foot massages for the Prime Minister. Then the Physical Therapist goes and buys herself a nice meal in a restaurant with 80$ out of them, then the Chef goes and buys himself some nice shoes in the shop with 64$ out of them, and so on and so forth... So... These 100 bucks generated tons of economic activity.

Now, I started to think about green consumerism... I guess the same effect happens here... Environmentally concerned consumers prefer to buy goods from environmentally concerned businesses which in turn buy their services from other green service providers, and so on and so forth... Which generate tons of green business activity towards a green revolution! Now, isn't it empowering to generate so much green economic activity from every buck you spend on green products/services??

Update: Hmmmm... As some of my economist friends have noted, on a second thought, this analysis is much too simplistic. Oh well...

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