Monday, February 11, 2008

The economic effects of keeping the change

Across the whole economy ‘kept’ change must add up to quite a lot. I wonder where it shows up in the economic statistics.

If, in the expected hard times ahead, people start looking after their pennies, will the net effect of collecting your change be to keep real consumer spending up, or to make it seem even further reduced? Volume up, prices down (relatively speaking)?

Some at least of the ‘kept’ change has been ending up in the charity sector. This casts new light on my observation of the behaviour of youngsters at the McDonalds counter. And gives me a new respect for McDonalds management for diverting this particular throwaway habit to good causes

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