Calculating Private Saving, Public Saving, and National Saving

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[@EconomicsinManyLessons]

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[@leonardhakizimana3696]

Thank you for this video,! You get a negative public saving is there any implication?

[@EconomicsinManyLessons]

Negative public saving means the government is running a budget deficit. As the budget deficit increases, the supply of loanable funds decreases, which causes real interest rates to rise. As the real interest rates rises, it costs more to borrow funds so private investment spending falls, reducing capital accumulation. This effect is sometimes referred to as the crowding-out effect.

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