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Are people hoarding cash/assets? From what I understand the savings rate has been dropping across the western world. In theory though, savings are countercycli
by benj111 4y ago
Are people hoarding cash/assets? From what I understand the savings rate has been dropping across the western world.
In theory though, savings are countercyclical. People made unemployed can still maintain their spending. So it helps break the feedback loop of redundancies -> falling spending -> redundancies.
Although we seem to be heading for recession, with high inflation and interest rates, so the normal mechanism of decreasing interest rates to get people spending isn't really available currently.
- bamboozled 4y agoI'm not spending my money until house prices come down basically, so maybe I'm the cause of the recession but bad luck I guess.
- benj111 4y agoIf you're refraining from spending you are suppressing inflation. Where high inflation looks like it is going to cause a recession. so I would say your actions are a net benefit.
- ChrisMarshallNY 4y ago> From what I understand the savings rate has been dropping across the western world. I’m not sure that’s the case. It may have just declined, but I think it was pretty high, during the COVID years.
- benj111 4y agoI was thinking generational timescales, rather than the last 2 or 3 years, so we're probably both right.