The Paradox of Thrift: How Mass Saving Can Threaten the Banking System
About this video
Explore the paradox of thrift and discover how mass saving can destabilize the banking system. Learn why too much saving can freeze money velocity and create liquidity mismatches, threatening the fractional reserve system. Understand the mechanics behind why economists worry when savings rates soar. Chapters: 00:00 Too Much Saving? 00:16 Money Velocity 00:32 Liquidity Mismatch 00:48 The Paradox Sources & further reading: ā¢ Federal Reserve Economic Data ā https://fred.stlouisfed.org/ ā¢ Bureau of Economic Analysis ā https://www.bea.gov/ ā¢ The General Theory of Employment, Interest, and Money ā Book by John Maynard Keynes introducing the paradox of thrift. ā¢ European Central Bank ā https://www.ecb.europa.eu/ ā¢ World Bank ā Provides historical economic analysis, including Japan's lost decade.
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