The interest rate balances Saving and Investment

The modern Keynesian theory of economics posits that there is no real correlation between saving and investment.  If the two are in equilibrium it is only by chance and the equilibrium could be at any level of employment.  Therefore, disruptions to the economy caused by this mismatch require that government intervene with fiscal and/or monetary policy.

However, in Classical theory, the rate of interest, if set by the market, acts as a natural barometer of the desire of participants to save or to spend.  Saving and investment will naturally move toward balance at full employment, without government intervention.