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Paradox of thrift, the Glossary

The paradox of thrift (or paradox of saving) is a paradox of economics.^[1]

60 relations: A Treatise on Money, Adam Smith, Aggregate demand, Austrian school of economics, Autonomous consumption, Balances Mechanics, Bernard Mandeville, Bertrand Russell, Capitol Hill Babysitting Co-op, Consumer spending, Debt deflation, Degrowth, Devaluation, Economics, Economics (textbook), Excess reserves, Fallacy of composition, Financial crisis, Friedrich Hayek, Frugality, German language, Gross output, Hyman Minsky, In Praise of Idleness and Other Essays, J. M. Robertson, Janet Yellen, John Cazenove, John Maynard Keynes, Keynesian economics, Liquidity preference, Liquidity trap, List of paradoxes, Loanable funds, Mainstream economics, Neoclassical economics, New Keynesian economics, Nominal rigidity, Paradox, Paradox of flexibility, Paradox of toil, Paul Krugman, Paul Samuelson, Prisoner's dilemma, Public sector, Recession, Robert P. Murphy, Saving, Say's law, Sectoral balances, Social trap, ... Expand index (10 more) »
Paradoxes in economics

A Treatise on Money

A Treatise on Money is a two-volume book by English economist John Maynard Keynes published in 1930. Paradox of thrift and a Treatise on Money are Keynesian economics.

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Adam Smith

Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment.

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Aggregate demand

In economics, aggregate demand (AD) or domestic final demand (DFD) is the total demand for final goods and services in an economy at a given time.

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The Austrian school is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivations and actions of individuals along with their self interest.

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Autonomous consumption

Autonomous consumption (also exogenous consumption) is the consumption expenditure that occurs when income levels are zero.

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Balances Mechanics

The Balances Mechanics (Saldenmechanik; from balances of bookkeeping respectively the credit system and mechanics to characterize the strict universal identities) is a work and mean of economics, comparable with Stock-Flow Consistent Modelling.

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Bernard Mandeville

Bernard Mandeville, or Bernard de Mandeville (15 November 1670 – 21 January 1733), was an Anglo-Dutch philosopher, political economist, satirist, writer and physician.

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Bertrand Russell

Bertrand Arthur William Russell, 3rd Earl Russell, (18 May 1872 – 2 February 1970) was a British mathematician, logician, philosopher, and public intellectual.

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Capitol Hill Babysitting Co-op

The Capitol Hill Babysitting Cooperative (CHBC) is a cooperative located in Washington, D.C., whose purpose is to fairly distribute the responsibility of babysitting between its members. Paradox of thrift and Capitol Hill Babysitting Co-op are Keynesian economics.

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Consumer spending

Consumer spending is the total money spent on final goods and services by individuals and households.

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Debt deflation

Debt deflation is a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages.

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Degrowth

Degrowth is an academic and social movement critical of the concept of growth in gross domestic product as a measure of human and economic development.

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Devaluation

In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket.

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Economics

Economics is a social science that studies the production, distribution, and consumption of goods and services.

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Economics (textbook)

Economics is an introductory textbook by American economists Paul Samuelson and William Nordhaus.

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Excess reserves

Excess reserves are bank reserves held by a bank in excess of a reserve requirement for it set by a central bank.

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Fallacy of composition

The fallacy of composition is an informal fallacy that arises when one infers that something is true of the whole from the fact that it is true of some part of the whole.

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Financial crisis

A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value.

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Friedrich Hayek

Friedrich August von Hayek (8 May 1899 – 23 March 1992), often referred to by his initials F. A. Hayek, was an Austrian-British academic, who contributed to economics, political philosophy, psychology, and intellectual history.

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Frugality

Frugality is the quality of being frugal, sparing, thrifty, prudent, or economical in the consumption of resources such as food, time or money, and avoiding waste, lavishness or extravagance.

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German language

German (Standard High German: Deutsch) is a West Germanic language in the Indo-European language family, mainly spoken in Western and Central Europe. It is the most widely spoken and official or co-official language in Germany, Austria, Switzerland, Liechtenstein, and the Italian province of South Tyrol.

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Gross output

In economics, gross output (GO) is the measure of total economic activity in the production of new goods and services in an accounting period.

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Hyman Minsky

Hyman Philip Minsky (September 23, 1919 – October 24, 1996) was an American economist, a professor of economics at Washington University in St. Louis, and a distinguished scholar at the Levy Economics Institute of Bard College.

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In Praise of Idleness and Other Essays

In Praise of Idleness and Other Essays is a 1935 collection of essays by the philosopher Bertrand Russell.

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J. M. Robertson

John Mackinnon Robertson (14 November 1856 – 5 January 1933) was a prolific Scottish journalist, advocate of rationalism and secularism, and Liberal Member of Parliament for Tyneside from 1906 to 1918.

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Janet Yellen

Janet Louise Yellen (born August 13, 1946) is an American economist serving as the 78th United States secretary of the treasury since January 26, 2021.

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John Cazenove

John Cazenove (1788–1879) was an English businessman and political economist.

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John Maynard Keynes

John Maynard Keynes, 1st Baron Keynes (5 June 1883 – 21 April 1946), was an English economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Paradox of thrift and John Maynard Keynes are Keynesian economics.

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Keynesian economics

Keynesian economics (sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and inflation.

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Liquidity preference

In macroeconomic theory, liquidity preference is the demand for money, considered as liquidity. Paradox of thrift and liquidity preference are Keynesian economics.

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Liquidity trap

A liquidity trap is a situation, described in Keynesian economics, in which, "after the rate of interest has fallen to a certain level, liquidity preference may become virtually absolute in the sense that almost everyone prefers holding cash rather than holding a debt (financial instrument) which yields so low a rate of interest."Keynes, John Maynard (1936) The General Theory of Employment, Interest and Money, United Kingdom: Palgrave Macmillan, 2007 edition, A liquidity trap is caused when people hold cash because they expect an adverse event such as deflation, insufficient aggregate demand, or war. Paradox of thrift and liquidity trap are Keynesian economics.

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List of paradoxes

This list includes well known paradoxes, grouped thematically.

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Loanable funds

In economics, the loanable funds doctrine is a theory of the market interest rate.

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Mainstream economics

Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis for discussion.

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Neoclassical economics

Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model.

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New Keynesian economics

New Keynesian economics is a school of macroeconomics that strives to provide microeconomic foundations for Keynesian economics. Paradox of thrift and New Keynesian economics are Keynesian economics.

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Nominal rigidity

In economics, nominal rigidity, also known as price-stickiness or wage-stickiness, is a situation in which a nominal price is resistant to change. Paradox of thrift and nominal rigidity are Keynesian economics.

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Paradox

A paradox is a logically self-contradictory statement or a statement that runs contrary to one's expectation.

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Paradox of flexibility

The paradox of flexibility is that a debt deflation shock can create a situation where increased price and wage flexibility results in decreased total demand. Paradox of thrift and paradox of flexibility are Keynesian economics and paradoxes in economics.

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Paradox of toil

The paradox of toil is the economic hypothesis that, under certain conditions, total employment will shrink if there is an increased desire among the population to take on paid work. Paradox of thrift and paradox of toil are Keynesian economics and paradoxes in economics.

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Paul Krugman

Paul Robin Krugman (born February 28, 1953) is an American economist who is the Distinguished Professor of Economics at the Graduate Center of the City University of New York and a columnist for The New York Times.

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Paul Samuelson

Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences.

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Prisoner's dilemma

The prisoner's dilemma is a game theory thought experiment that involves two rational agents, each of whom can cooperate for mutual benefit or betray their partner ("defect") for individual reward.

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Public sector

The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises.

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Recession

In economics, a recession is a business cycle contraction that occurs when there is a general decline in economic activity.

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Robert P. Murphy

Robert Patrick Murphy (born May 23, 1976) is an American economist.

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Saving

Saving is income not spent, or deferred consumption.

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Say's law

In classical economics, Say's law, or the law of markets, is the claim that the production of a product creates demand for another product by providing something of value which can be exchanged for that other product.

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Sectoral balances

The sectoral balances (also called sectoral financial balances) are a sectoral analysis framework for macroeconomic analysis of national economies developed by British economist Wynne Godley.

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In psychology, a social trap is a conflict of interest or perverse incentive where individuals or a group of people act to obtain short-term individual gains, which in the long run leads to a loss for the group as a whole.

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References

[1] https://en.wikipedia.org/wiki/Paradox_of_thrift

Also known as Paradox of saving, The paradox of thrift, Thrift paradox.

, Subprime mortgage crisis, The Fable of the Bees, The General Theory of Employment, Interest and Money, Tragedy of the commons, Underconsumption, Vicious circle, Waddill Catchings, William Smart (economist), William Trufant Foster, Wolfgang Stützel.

Paradox of thrift, the Glossary

Table of Contents

See also

Paradoxes in economics

References