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Deleveraging

Posted on July 26, 2008

Paul McCulley of PIMCO: PIMCO - Global Central Bank Focus - July 2008 The Paradox of Deleveraging : [M]acroeconomics is not just the summation of microeconomic outcomes, but rather the interaction of microeconomic outcomes. For me, a simple concept brought this realization: the paradox of thrift... if we all individually cut our spending in an attempt to increase individual savings, then our collective savings will paradoxically fall because one person s spending is another s income... what holds for the individual doesn t necessarily hold for the community of individuals. Understandin...

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central bank , deficit , deflation , economy , fed , federal reserve , housing , taxes , the fed , treasuries