Title

Empirical Analysis of the Saving Rate in the United States

Document Type

Article

Publication Date

4-2013

Publication Source

Journal of Management Policy and Practice

Volume

14

Issue

2

Inclusive pages

46-53

ISBN/ISSN

19138067

Peer Reviewed

yes

Abstract

After two decades of decline, the personal saving rate in the United States has increased since the onset of the Great Recession. This paper empirically analyzes the factors affecting the saving rate and factors that contributed to the recent increase in the saving rate. Our results imply that changes in the determinants of the saving rate suggested by economic theory can explain much of the recent trend in the personal saving rate. Specifically, reduction in the household net wealth had the largest contribution to the increase in the saving rate, while reduction in interest rates negatively affected households’ incentives to save. These findings have important policy implications.

Disciplines

Economics