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Everyone here who fancies themselves as an economic pundit seriously needs to read Economics in One Lesson:

"“Saving,” in short, in the modem world, is only another form of spending. The usual difference is that the money is turned over to someone else to spend on means to increase production. So far as giving employment is concerned, Benjamin’s “saving” and spending combined give as much as Alvin’s spending alone, and put as much money in circulation. The chief difference is that the employment provided by Alvin’s spending can be seen by anyone with one eye; but it is necessary to look a little more carefully, and to think a moment, to recognize that every dollar of Benjamin’s saving gives as much employment as every dollar that Alvin throws around."

http://jim.com/econ/chap24p1.html



That's not completely true.

Spending increases the velocity of money ( http://en.wikipedia.org/wiki/Velocity_of_money ) which can, in the short term, increase employment.


Saving/investment also increases employment as the borrowers use it to increase their capital (buy more machinery etc), which needs extra employment.




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