Become a Summer Grillmaster: How to Blend Your Own Spices - Editor’s note: This is a guest post from Tim Ziegler. Man has been cooking outdoors since the beginning of time. By ancient practice it was just one of the...
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[O]ne of the high points of the semester, if you're a teacher of introductory macroeconomics, comes when you explain how individual virtue can be public vice, how attempts by consumers to do the right thing by saving more can leave everyone worse off. The point is that if consumers cut their spending, and nothing else takes the place of that spending, the economy will slide into a recession, reducing everyone's income.
In fact, consumers' income may actually fall more than their spending, so that their attempt to save more backfires — a possibility known as the paradox of thrift.