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Economics

The Paradox of Thrift in a Recession

Quick fact

The paradox of thrift was popularized by John Maynard Keynes in the 1930s, and it suggests that an increase in the desire to save might never actually lead to higher savings for the economy as a whole.

Why this is interesting

You're told to save for a rainy day, but what if everyone does it at once? Could collective thrift actually make everyone poorer?