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Economics Quote by Michael Spence

“In economies with excess productive capacity, targeted investment can yield a double benefit, generating short-run demand and boosting growth and productivity thereafter.” quote by Michael Spence
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“In economies with excess productive capacity, targeted investment can yield a double benefit, generating short-run demand and boosting growth and productivity thereafter.”

Michael Spence

About This Quote

Source Paper: Economic Growth and Capacity Utilization, 2015

Investing in underused resources creates immediate demand and long‑term productivity gains.

In simple terms: Targeted investment boosts demand and future growth.

Key Takeaway

Invest in idle capacity now.

Themes

economics investment growth

Mood

analytical optimistic

Type

policy strategic

When to use this quote

  • government stimulus
  • business expansion
  • infrastructure projects
  • technology upgrades

Key Concepts

capacity utilization multiplier effect

Questions to Reflect On

  • How can we identify truly underused capacity?
  • What safeguards ensure investments stay targeted?
A Different Perspective

Benefits assume efficient allocation; misallocation can waste resources.

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