Income drives the economy, not prices ...Middle East

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Income drives the economy, not prices
Politicians and business leaders often make claims about why certain sectors in the economy are shrinking, such as the decline in U.S. manufacturing is due to robotics or trade with China. Such assessments are flawed, as the sectoral composition of the economy is mostly driven by preferences and not by productivity, according to a recent study that models this long-run structural change in the economy. As consumers become richer, they spend more on services, and less on agriculture and manufactured goods.

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