paradox of thrift

English edit

paradox of thrift (plural paradoxes of thrift)

(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.
- 2020 April 9, Gaby Hinsliff, “We used to moan about normal life, now our fear is we'll never get it back”, in The Guardian‎^[1]:
  The worse things get, meanwhile, the greater the tendency even for those who still feel secure in their jobs to hoard their cash for fear of what lies around the corner. This is the so-called paradox of thrift: that in a recession, people instinctively try to save their money instead of spending it, and thus inadvertently make things worse.