Actually, &quot;efficient&quot; factories that don&#x27;t face competitive pressures (i.e. that don&#x27;t drop their prices) will have a lower multiplier.<p>Money spent on wages gets spent and circulated within the economy at a higher rate than money that is diverted towards profits (which tends to bid up the value of fixed assets in a demand constrained environment).<p>&gt;the inefficient one consumes money that could otherwise be invested in more demand producing factories, employing workers in demand producing activities.<p>Well, if you assume that opportunities for &quot;demand producing activities&quot; (i.e. products which will convince the Japanese to stop saving at such a high rate) are plentiful then yes. In the 80s perhaps.<p>But they&#x27;re not. The Japanese really can&#x27;t be convinced to spend.