The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Forced Saving

  • Björn Hansson
Reference work entry


The forced saving doctrine proposes that an increase in the amount of money may be favourable to capital accumulation at the cost of a reduction in consumption of certain individuals, who have not saved voluntarily. A consensus emerged that new credit might lead to additional, at least temporary, investment even in a full employment situation via an increase in the price level, though Lindahl and Keynes did not consider the extra saving to be forced. However, it was generally thought unwise and unjust to rely on credit inflation as a means of increasing capital accumulation.


Bentham, J. Bullionist Controversy Business cycle Capital accumulation Credit cycle Forced saving Hayek, F. A. von Inflation Keynes, J. M. Lindahl, E. R. Malthus, T. R. Mises, L. E. von Over-investment Ricardo, D. Robertson, D. H. Saving equals investment Thornton, H. Voluntary saving Wicksell, J. G. K 

JEL Classifications

B1 B2 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Björn Hansson
    • 1
  1. 1.