Another example of this paradox is when the risk of unemployment rises during a recession, leading some households to cut back on spending and focus on building precautionary savings. This may make sense for individuals, but it takes a toll on total spending and demand. As businesses respond to that weaker  2007–2009 Drop in Employment?” Econometrica 82, no.
6 (November 2014): 2197–2223; and G. B. Eggertsson and P. Krugman, “Debt, Deleveraging, and the Liquidity Trap: A Fisher-MinskyKoo Approach,” Quarterly Journal of Economics 127, no. 3 (August 2012): 1469–1513.