For domestic spending, no, it doesn't ever have to. It only has to compensate for an excess in effective demand. The example of the movie theatre that can seat 100 and that we have printed out 80 tickets for is exactly right: as long as we do not print out 21 extra tickets, there is not a problem. ------------------------------
The question becomes: Assuming perfection is unattainable, is it better to print out 21 or 19 tickets? To carry the ticket metaphor a bit further, airlines routinely overbook. They do that to increase the odds of filling all the seats. They have mechanisms in place to deal with the awkward situation when too many passengers show up. Which brings us to the concept of the nairu, which I would say, as a general explanation, is an utter and complete fallacy. Yet throughout history there are many examples of uncontrollable, accelerating inflation. How do we explain them? _____________________________________________________________ Get 25MB, POP3, Spam Filtering with LYCOS MAIL PLUS for $19.95/year. http://login.mail.lycos.com/brandPage.shtml?pageId=plus&ref=lmtplus ==^================================================================ This email was sent to: archive@mail-archive.com EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^================================================================
