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By contrast, if people stop spending, firms stop making money, and their employees start losing their jobs.
Another was the supposed depth and sophistication of the rich world's financial systems, which, it was said, allowed households to smooth their spending, firms to diversify their borrowing and banks to unburden their balance-sheets.
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If households believe they will spend, firms will hire, and prices will rise.
When including a multiplicative term interacting the existence of payback clauses with turnover, no significant difference emerges in the relationship of turnover and CVT spending between firms applying payback clauses and firms not applying payback clauses (Table 2, column 6).
People stop spending and firms stop investing.
Paradoxically, the plunge in technology spending by firms has helped.
On the other hand, spending by firms could pick up.
That change came largely from big cuts in spending by firms in France and Spain.
Consumer spending and firms' investment will be dragged lower by the need to pay back debt and restore savings.
The miserable record of its social spending deprives firms of well-nourished, well-schooled workers, and saps the political will for reform.
As economies fall deeper into recession and spending shrinks, firms will have to compete harder for sales by pricing their wares keenly.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com