Robert Skidelsky: “We have a problem of deficient aggregate demand… full stop.”

INET has a great interview with Robert Skidelsky. It is well worth watching. Here is the link

He talks about political power in determining which economic theories get applied. He talks about fiscal policy.

He mentions that trying to re-work supply side reforms while the markets are weakening in demand can be unproductive. Many other good points in the interview.

From my own perspective… The reason that effective demand will keep real GDP from reaching potential output is because labor share of income has fallen. Thus a consequence is deficient aggregate demand, in the sense that demand has the effective potential to only take us part way to potential supply output.