With loans and other forms of finance, the substitution effect has long been the rule.

FORBES

There are many reasons why households might extract equity from their homes: to finance household expenditures, to make major home repairs or improvements (so-called residential investment), to consolidate more costly debt, such as credit card debt, to invest in personal businesses or other forms of entrepreneurship, to help finance the purchase of other real estate, or to engage in a form of investment arbitrage, or a mixture of the above.

FORBES: Home Equity Extraction: Where Did All The Money Go?

But at Unison's conference, members have been debating their opposition to the controversial private finance initiative (PFI) and other forms of privatisation in the public sector.

BBC: Union warns of strike threat

When consumers put more of their money in their savings accounts, the funds would be lent out to finance the production of factories, machines, computers and other forms of physical capital.

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