https://market.subwiki.org/w/index.php?action=history&feed=atom&title=Paradox_of_thrift 2026-07-14T06:15:29Z Revision history for this page on the wiki MediaWiki 1.41.2 https://market.subwiki.org/w/index.php?title=Paradox_of_thrift&diff=213&oldid=prev 2009-06-17T22:56:44Z

<p>Created page with &#039;==Statement== ===Statement of the paradox=== The &#039;&#039;&#039;paradox of thrift&#039;&#039;&#039; (also called the &#039;&#039;&#039;paradox of saving&#039;&#039;&#039;) says the following: if everybody (individuals/households) inc...&#039;</p> <p><b>New page</b></p><div>==Statement==<br /> <br /> ===Statement of the paradox===<br /> <br /> The &#039;&#039;&#039;paradox of thrift&#039;&#039;&#039; (also called the &#039;&#039;&#039;paradox of saving&#039;&#039;&#039;) says the following: if everybody (individuals/households) increase their saving, then this results in a decline in their spending, leading to a decline in [[aggregate demand]], and a shrinking of the economy. This may, in the somewhat longer run, lead to a decline in the savings rate of the economy.<br /> <br /> The paradox was introduced by [[John Maynard Keynes]].<br /> <br /> ===Partial resolution of the paradox===<br /> <br /> If the money saved by individuals and households can be borrowed by others (possibly other individuals, or businesses) then increased saving need not lead to a decline in the economy. This is because an increase in the total saving by individuals and households increases the supply of money, pushing down interest rates and making it more attractive for businesses to borrow money, possibly to expand their capital stock or enhance production.</div>

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