What is ‘National Savings Rate’
An estimate from the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) of the amount of income left over after subtracting consumption costs and expenditures. The National Savings Rate, though it is referred to as a “savings rate,” does not actually measure the amount of money Americans are saving or investing for the long-term. National savings include savings left over from personal, business and government.
Explaining ‘National Savings Rate’
The National Savings Rate is confusing at first glance, due to the fact that it is often substantially less than what the typical American reports contributing to their employer-sponsored retirement plans and IRAs. This difference is because the national savings rate includes government savings, and they are usually reporting deficits which lowers the national savings rate.
Further Reading
- dependency ratio, foreign capital inflows and the rate of savings in Pakistan [with comments] – www.jstor.org [PDF]
- The Chinese corporate savings puzzle: a firm-level cross-country perspective – www.nber.org [PDF]
- Do private pensions increase national savings? – www.sciencedirect.com [PDF]
- National savings rate and sectoral income distribution: An empirical look at China – www.sciencedirect.com [PDF]
- Demography, national savings, and international capital flows – www.jstor.org [PDF]
- Recent Evidence on Budget Deficits and National Savings – www.nber.org [PDF]
