What Happens If Domestic Investment Exceeds Domestic Savings?

Explain please.
Thanks!

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2 Comments

  1. foolcow
    Posted November 19, 2009 at 11:29 pm | Permalink

    This can only happen when a central bank keeps interest rates artificially low.
    Businesses are misled into starting projects which cannot be profitable in the long run (since the real resources aren’t available), and then eventually have to be abandoned, which involves laying-off workers and restructuring.

  2. mac
    Posted November 20, 2009 at 5:45 am | Permalink

    greed has triumphed over fear. investments means folks have confident they could make money, savings means folks are worried about the future

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