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This has long been empirically observed (see https://en.wikipedia.org/wiki/Paradox_of_thrift https://en.wikipedia.org/wiki/Paradox_of_thrift), but different sch
by temp-dude-87844 8y ago
This has long been empirically observed (see https://en.wikipedia.org/wiki/Paradox_of_thrift https://en.wikipedia.org/wiki/Paradox_of_thrift), but different schools of economic thought have different opinions about whether it's sufficient to result in a vicious cycle.
- hopler 8y agoThe escape from the paradox of thrift is to create things now that will be valuable in the future (durable goods, or education), or to lend money to people who need things now (aka investing). (Or give money away for that's but that's economically equivalent to lending, in a general sense.)