The Invisible Hand | Aug 15, 2012 | 27:30
Paradox of Thrift
When times are tough, individuals and families often try to save a little extra in case they need it down the road. Politicians often talk about this kind of "belt tightening" for governments as well. But economists who follow the theories of John Maynard Keynes would say that approach is the wrong one for governments, and for society overall. On this episode, we explore the Paradox of Thrift, a concept that says when everyone saves all at once, overall savings can actually disappear.