# Paradox of Thrift

*Macro & Economy — Finicade finance glossary*

The twist where everyone saving more at once shrinks the economy — less spending means less income, so total saving may not even rise. What's prudent for one household can backfire for all of them.

**Also known as:** paradox of thrift

**Related terms:** [Fiscal Policy](https://finicade.com/glossary/fiscal-policy), [Recession](https://finicade.com/glossary/recession), [Ricardian Equivalence](https://finicade.com/glossary/ricardian-equivalence)

**Taught in:** Macro & Markets — The Goods Market & the Multiplier

Source: https://finicade.com/glossary/paradox-of-saving