Activity Quote by Martin Feldstein
“A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.”
About This Quote
Source Academic paper: Economic Theory of Savings, 1995
High saving rates can slow short‑term demand but are essential for long‑term investment and growth.
In simple terms: Saving slows today, fuels growth later.
Key Takeaway
Balance saving with spending to sustain economy.
Themes
economics
investment
growth
Mood
analytical
informative
Type
theoretical
practical
When to use this quote
- national budgeting
- personal finance
- business planning
Key Concepts
macroeconomics
intertemporal choice
policy
Questions to Reflect On
- How much should households save versus spend?
- What policies can smooth saving fluctuations?
A Different Perspective
Excessive saving may cause recession if not managed.
