underconsumption
Sign in to saveUnderconsumption is a theory in economics that recessions and stagnation arise from an inadequate consumer demand, relative to the amount produced. In other words, there is a problem of overproduction and overinvestment during a demand crisis. The theory formed the basis for the development of Keynesian economics and the theory of aggregate demand after the 1930s.
~13 min read
Encyclopedic overview
12 sectionsContents
- Theory
- Keynesian
- Marxian
- History
- 16th century through 18th century – mercantilism
- 19th century
- 20th century – pre-Keynes
- Legacy
- Criticism
- See also
- References
- Bibliography
Underconsumption is a theory in economics that recessions and stagnation arise from an inadequate consumer demand, relative to the amount produced. In other words, there is a problem of overproduction and overinvestment during a demand crisis. The theory formed the basis for the development of Keynesian economics and the theory of aggregate demand after the 1930s.
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Excerpted from Wikipedia’s “underconsumption” article, available under the CC BY-SA 4.0 licence.