A Theory of Accumulation and Secular Stagnation, Author: Daniel Aronoff.
Thomas Malthus’s key insight, Aronoff stresses, is his theory of accumulation, the state in which “economically significant” entities, such as wealthy individuals, corporations, and countries with mercantilist policies (Aronoff points to China as a prime example), hoard financial assets, intending never to spend a good portion of them.
A prominent assumption of economic theory is that savers will eventually need to spend their money, whether to fund retirement, invest in growth projects, build infrastructure, or serve some other purpose. Take away this important assumption, however, and the rest of the theory loses much of its value as an explanatory instrument.
At the micro level, accumulation is a logical action if one expects deflation in the future. If many wealthy individuals, corporations, and governments adopt this tactic, however, massive repercussions could arise throughout the global economy, creating a self-fulfilling prophecy.