Savings rate

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Savings rate

Personal savings as a percentage of disposable personal income.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Savings Rate

The amount a person or organization places in a savings account or similar vehicle as a percentage of total disposable income. Savings are important for long term financial stability as it gives a person or organization a cushion for bad times. The savings rate may be calculated at microeconomic level for personal finances or may be aggregated at the national level to gauge financial health. A low or negative savings rate usually indicates excessive borrowing, spending, or both. On the other hand, a high savings rate may result in slower economic growth as persons and companies are saving instead of purchasing goods and services. See also: Rainy day fund.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
If agents cannot borrow at all and the optimal timing for purchasing a home is still t+1 periods after birth (we examine the robustness of the results to this assumption later), the would-be homebuyers must then increase their saving rates before period t+1.
This paper investigates these concerns in a two-country OLG model of the world economy with country-specific saving rates to mimic Asian economies.
Saving rates have been steadily increasing since the onset of recession - after briefly turning negative for the first time at the beginning of 2008 - as households build up a buffer against the threat of unemployment.
A study of the possible impact of higher household saving rates says any increase "is likely to have important consequences for the economic outlook".
However, no insight into retirement saving can be gleaned from aggregate measures of household saving rates. It is the accumulation of wealth at the individual level that is the critical indicator.
National saving rates differ enormously across developed countries.
Russia and the other oil and gas producers need to increase investment in domestic projects to reduce their national saving rates. Some investment spending, however, could be directed to improve oil sector production.
But the sensitivity of private saving rates to programme design is an empirical issue, and is investigated here.
Using several large data sets, they find a strong positive relation between saving rates and lifetime income.
He said that promoting FDI was important for Pakistan to supplement low domestic investment and saving rates, improve revenue growth, create jobs and reduce poverty.
From this point of view, our high current account deficits are the logical result of our low national saving rates as compared with our national investment rates.
The investment and saving rates in Pakistan could not achieve significant growth in the past three decades and resulted in slow economic growth.