Candidate Lee Jae-myung's ”Hotel Economics” sparks controversy... What are economists saying about it? - Korean media

With the "hotel economics" proposed by Lee Jae-myung, presidential candidate of the Democratic Party of Korea, under attack from conservative camps, a professor of economics at Seoul National University and a master's degree in economics at the University of Mainz in Germany proposed the idea.
Former member and writer Yoo Shi-min commented that "this is a debate that is difficult to digest without graduate-level knowledge of economic policy history."
Writer Yu appeared on MBC's "100 Minute Discussion" broadcast on the 20th (Photo: MBC Capture)
On this day, when Lee Jae-myung's "Hotel Economics" became a hot topic, writer Yu said, "The context of the facts is very complicated," and he pointed out that the dominance of Keishan economics collapsed in the 1970s and after.
In other words, author Yu argues that "hotel economics" was an extreme example of financialism, which was used to oppose the monetaryists who said that "government fiscal policy has no effect."
Regarding "Hotel Economics," writer Yu said, "There are times when a hotel receives 100,000 won (about 10,400 yen), but does not know that the payment for that amount will be canceled later.
"This is an argument made to strengthen the fiscalists' self-proclaimed argument that the effects will come from introducing policy measures that the public cannot predict."
He added, "This issue is not about extreme problems colliding, but the truth of our lives is that
"It's somewhere in between," he said, speaking on behalf of candidate Lee's position, saying, "Candidate Lee just gave that example to emphasize the importance of fiscal policy."
However, Yu said, "This debate is difficult to understand without a high level of knowledge of economic policy history at the graduate school level.
"It was interesting to see the clash between those who favored an aggressive fiscal policy and those who opposed it," he said.
Candidate Lee's "hotel economics" was mentioned during a campaign rally in Gunsan, North Jeolla Province on the 16th, drawing attention.
At the time, Lee said, "A tourist pays a 100,000 won deposit to a hotel, the hotel owner uses this money to pay off the accounts receivable of a furniture store, and the owner of the furniture store eats chicken at a chicken restaurant.
The shop owner bought the goods from the stationery store, and the stationery store owner repaid the debt to the hotel," he said. "Then, the traveler canceled the reservation and received a refund of 100,000 won.
"Even though no money was coming into the neighborhood, the economy was running. This is economics," he explained. Later, at a television debate on the 18th, Reform Party's Lee Jun-seok
The candidates continued to attack "hotel economics." Candidate Lee Jun-seok pointed out that "money does not disappear in the process of circulating, and the marginal propensity to consume continues to circulate at 1." Candidate Lee responded, "It is not possible to return to 1.
"I have only heard that as an extreme example once," he explained, "and my point was that economic circulation is important."