Fiscal policy key to reducing wealth inequality and boosting economic growth
The article discusses how the overall demand for goods and services affects individual businesses, leading to an underuse of the economy's full potential. This underutilization impacts income and wealth distribution, with higher wages and worker wealth possible at full capacity. Policies that boost demand can improve income equality and wealth distribution. The research also looks at how demand shocks have lasting effects and explores the impact on employment and economic growth. These findings help explain why the economy has struggled in recent years and highlight the importance of government spending during major crises like the Covid-19 pandemic.