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That's a quite simplistic Keynesian view of economics. Economy != money changing hands. Savings are necessary for economic growth as they represent unspent reso
by vkhorikov 8y ago
That's a quite simplistic Keynesian view of economics. Economy != money changing hands. Savings are necessary for economic growth as they represent unspent resources in the economy that can be put into long-term projects and investments.
- riku_iki 8y agoThat's the thing with deflation: money holders don't have incentive to put it into "long-term projects".
- vkhorikov 8y agoDo the money holders keep their money in their house? Or do they keep it in banks? What the banks do with the money? Nothing? Or lend it to new businesses/invest it?