A Paradox is an apparent contradiction

It is always considered to be prudent, thrifty, and wise to save some money in order to have some in reserve for the "rainy day" or for any opportunity that might arise

  The Paradox is that the more we, as a nation, saved the less well off was the economy and, therefore, the poorer we all were.

Rounded Rectangular Callout: The Paradox of Thrift

To appreciate this Paradox you should understand the following Multiplier terms


If you don't understand them, or just want to be reminded of what they mean in economic terms, click on the Terms page. 


Otherwise continue to the Multiplier page.


  • Marginal Propensity to Save



Rounded Rectangular Callout: The Multiplier

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