4 ms·
if its not spent, its saved somewhere. Very few people put substantial amounts of cash in their mattress. Most goes in the bank, which helps set the rate if int
by abfan1127 7y ago
if its not spent, its saved somewhere. Very few people put substantial amounts of cash in their mattress. Most goes in the bank, which helps set the rate if interest rates for loans. So, even unspent money goes somewhere and gets spent. Still not a recession.
- JamesBarney 7y agoThe problem is near term interest rates are near 0, so the casual pathway of money saved -> lower interest rates -> more investment isn't as effective. This is why quantitative easing has so little impact. And a saved dollar is spent less than a spent dollar.
- abfan1127 7y agolow interest rates are supposed to provide information regarding the value of money spent vs. money saved. However that function isn't allowed to work. Further quantitative easing add(s|ed) further noise to the flow of money from investment to spending.