Comments: The article describes the reaction of the British economy to the current economical downturn. It’s been stated that the economy shrinks faster than expected but it is also stated that the households have already reacted.
Their reaction is simple. They’re saving their money for a rainy day; i. e. the savings ratio has increased.
Your Keynesian economic “experts” (including the Czech Social Democrats) would say that this is bad for the economy because the economy needs huge spending in consumption. They always forget the simple fact that it’s the savings where the firms get money for their investments from.
I find it good that it is also stated in the article that “On the face of it this rise is good news — it means that a large portion of the necessary rebalancing of the economy away from spending and towards saving has occurred already.”
I am satisfied with this article which is not very normal, as you could see from my previous comments.
This entry was posted by MMister on 14. 04. 2009 at 13:33, and is filed under notes. Follow any responses to this post through RSS 2.0.
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