Demand-side economics needs to be stepped up

Tokyo

WE often hear the term "supply and demand" in discussions on economic. If the two are in balance, an economy is likely to be stable, but if there is excess supply and not enough demand (or vice-versa), things get out of balance and corrections are needed on one side or another in order to restore stability.

Arguably, too much attention has been paid in recent times to the "supply" side of things and not enough to the "demand" side. This has a lot to do with the state that the global economy is in now, as stock markets slide, economic growth falls, trade flows slump and the tide of international capital ebbs and flows alarmingly.

Central banks have been competing aggressively to increase the supply of money to their economies by one means or another. (However, this - rather confusingly - is known in economics as a "demand-side" move, given that it aims at making spending …