Question about Supply Side Economics/Trickle Down Economics/Horse and Sparrow theory

[wufwugy]

When there is a change in quantity demanded, producers certainly try to meet it, which can result in a change in production. If it's an increase then it does mean that there is an increase in prosperity, roughly speaking.

I forgot to add that this is only an increase in total production if it comes from something like an increase in wealth. Even if a poor person with a small savings account pulls out of that savings account to consume currently more than he typically does, it's not an increase in total production due to the detraction of saving and all that goes along with that. In some cases -- I think in most cases -- that would actually result in a decrease in total production.

[CoccoBill]

I forgot to add that this is only an increase in total production if it comes from something like an increase in wealth. Even if a poor person with a small savings account pulls out of that savings account to consume currently more than he typically does, it's not an increase in total production due to the detraction of saving and all that goes along with that. In some cases -- I think in most cases -- that would actually result in a decrease in total production.

Doesn't this depend entirely on what type of goods we're talking about? 1000 poor people probably use more toilet paper than 1 rich guy, but the 1 rich guy probably always buys more private jets. Coke and bitches might be a toss-up.

[wufwugy]

Doesn't this depend entirely on what type of goods we're talking about? 1000 poor people probably use more toilet paper than 1 rich guy, but the 1 rich guy probably always buys more private jets. Coke and bitches might be a toss-up.

If we assume the same amount is spent in each case, I don't know of any models economists have that would show a difference in effect on the economy. Though there WOULD be a difference, it's just a guess as to what the difference is. GDP equations treat a $1000 spent on toilet paper the same as $1000 spent on materials to help build a large water vessel.