[{"data":1,"prerenderedAt":58},["ShallowReactive",2],{"term:paradox-of-thrift":3},{"term":4,"related":45},{"id":5,"title":6,"body":7,"category":27,"description":28,"extension":29,"faq":30,"meta":31,"navigation":32,"path":33,"related":34,"seo":38,"stem":39,"takeaways":40,"__hash__":44},"terms\u002Fterms\u002Fparadox-of-thrift.md","Paradox of Thrift",{"type":8,"value":9,"toc":22},"minimark",[10,15,19],[11,12,14],"h2",{"id":13},"understanding-paradox-of-thrift","Understanding Paradox of Thrift",[16,17,18],"p",{},"Saving more is wise for one household. But if all households cut spending together, businesses sell less, cut jobs and incomes fall, so total saving can end up unchanged or lower.",[16,20,21],{},"The idea, popularized by Keynes, explains why falling demand can deepen recessions.",{"title":23,"searchDepth":24,"depth":24,"links":25},"",2,[26],{"id":13,"depth":24,"text":14},"economy","When everyone tries to save more at once, total saving may not rise because income falls.","md",[],{},true,"\u002Fterms\u002Fparadox-of-thrift",[35,36,37],"keynesian-economics","aggregate-demand","marginal-propensity-to-consume",{"title":6,"description":28},"terms\u002Fparadox-of-thrift",[41,42,43],"Individual saving is prudent; collective saving can shrink income.","It illustrates a fallacy of composition.","It helps explain demand-driven recessions.","Z4yIbRlIpyoX2WLSr6dMNWK5n25apwz9WqgqQVjP1wQ",[46,50,54],{"title":47,"description":48,"path":49},"Aggregate Demand","Total spending on an economy's goods and services at each overall price level.","\u002Fterms\u002Faggregate-demand",{"title":51,"description":52,"path":53},"Keynesian Economics","The school of thought that total demand drives output and employment in the short run, and that policy can stabilize it.","\u002Fterms\u002Fkeynesian-economics",{"title":55,"description":56,"path":57},"Marginal Propensity to Consume (MPC)","The share of an extra dollar of income that a household spends.","\u002Fterms\u002Fmarginal-propensity-to-consume",1793374005613]