Because the propensity to consume is not equal across the economic spectrum; downward redistribution increases expected consumption and, therefore, overall price levels.
The idea that this would eat up the beneficial effects of BI is hard to justify, but the idea that some increase in overall price level is likely is pretty easy to justify.
Because the propensity to consume is not equal across the economic spectrum; downward redistribution increases expected consumption and, therefore, overall price levels.
The idea that this would eat up the beneficial effects of BI is hard to justify, but the idea that some increase in overall price level is likely is pretty easy to justify.