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The paradox of thrift suggests that when households collectively try to save more, overall demand falls and the economy may shrink.
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The paradox of thrift suggests that when households collectively try to save more, overall demand falls and the economy may shrink.
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Related words
paradox of thrift
Noun
(economics)
A
paradox
of
economics,
stating
that
an
increase
in
autonomous
saving
leads
to
a
decrease
in
aggregate
demand
and
thus
a
decrease
in
gross
output
which
will
in
turn
lower
total
saving:
narrowly
speaking,
total
saving
may
fall
because
of
individuals'
attempts
to
increase
their
saving,
and,
broadly
speaking,
increase
in
saving
may
be
harmful
to
an
economy.
Japanese Meaning
（経済学）節約の逆説：個人が貯蓄を増やそうとすると、総需要が低下し、結果として国内総生産が縮小、全体の貯蓄額も減少する可能性がある現象。 / 個々の貯蓄の増加が、経済全体における需要減少と生産縮小を引き起こし、その結果として総貯蓄が減少するという逆説的な現象。
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