This is supported by both basic macroeconomic theory and recent experience.

FORBES: Bill Gross & Jeff Gundlach Make Bold Calls Based On Monetary Policy

Professor Neumark summarized some of their findings in a column published in the Wall Street Journal last summer, and he discusses the basic economic theory (and the evidence) in a short, accessible 2006 Policy Study for the Show-Me Institute.

FORBES: Resources on the Minimum Wage

That's the basic economic theory of hospitals, and it explains why hospital bills are out of sight.

FORBES

And as basic economic theory tells us, in any given system, when you increase supply without boosting demand, the result is that prices fall.

FORBES: Facebook Shares Heading Lower As First Lock-Up Expires

Even if our basic theory is that economy is elastic in response to nominal stress and plastic in response to real stress, a sudden change in rigidity combined with a large nominal shock could cause a very large plastic deformation in the economy.

FORBES: NGDP in the Long Run and Economic Plasticity

When it comes to welfare reform, questions of religious faith, political theory, economics and behavioural psychology all converge on the same basic issue.

BBC: God, poverty and the government

We quickly realized that technically what we had engineered was out of the reach of most individuals and many nonprofits and that most didn't understand the basic game-theory of crowd-sourced fund raising.

CNN: Web the new frontier for activism

The basic asset allocation theory that caught on was based on some long-term data and showed the value of blending stocks, bonds and cash.

FORBES: Fake Diversification: Does Asset Allocation Work?