can increase net exports. Austrian School criticism The Austrian School economist Friedrich Hayek criticized the paradox in a 1929 article, "The 'Paradox' of Savings", questioning the paradox as proposed by Foster and Catchings. Hayek, and later Austrian School economists agree that if a population saves more money, total revenues for companies will decline, but they deny the assertion that lower revenues lead to lower economic growth, understanding that the additional savings are used to create more capital to increase production. Once the new, more productive structure of capital has reorganized inside of the current structure, the real costs of production is reduced for most firms. Some criticisms argue that using accumulated capital to increase production is an act which requires spending, and therefore the Austrian argument does not disprove the paradox. However, this confuses spending on capital goods with spending on consumer goods. The paradox only refers to saving by not spending on consumer goods and ignores the productive use of those savings. See also Capitol Hill Babysitting Co-op Degrowth Frugality List of paradoxes Social trap Vicious circle Tragedy of the commons In Praise of Idleness and Other Essays, an essay by Bertrand Russell on the subject of the relationships between spending, saving and labour References and sources References Sources External links The paradox of thrift explained Archived from the original. Criticisms The Paradox of Thrift: RIP, by Clifford F. Thies, The Cato Journal, Volume 16, Number 1 Consumers don't cause recessions by Robert P. Murphy (an Austrian School critique of the paradox of thrift) Keynesian economics Paradoxes in economics