Independence savings rate and economic growth rate (2017 update)

Independence savings rate and economic growth rate (2017 update)

In the economic literature there is the conclusion that the rate of economic growth and savings rates are interdependent. It is understood that it would be extremely simplification economic development understood only as a function of the size of savings. However it cannot be disputed really very important role in the development process. There are a number of factors that affect the amount of savings in a national economy. At the level of the national economy propensity to save depends on the size of the national income, income distribution, existence of relevant financial institutions, macroeconomic measures to stimulate savings. Besides that, the value systems that can emphasize the special character of accumulate wealth.

The marginal propensity to save is greater in developed compared to developing economies. As pointed out by D. Marsenić as a country is under developed. For examples, what is in the lower national income per head count, to her less able to set aside for savings? While the minimum allocations exhibit such dramatic social act. However, there are very large differences in the marginal propensity to save and between economically developed countries. A good example is difference as the rate of national savings USA and Japan. In the United States as the leading economic power of the modern world savings rate is much lower level compare to the country. That has the most outstanding trend of increase of its economic wealth in the period after World War II.

United States people save less than others country

The logical questions for customers of United States are save less than other countries? First, the United States has a big budget deficit. While most industrialized countries have a budget reminding. Second, demographic factors have a major impact. Third, it is easier to borrow in the US than in many other countries.

In other countries, people have to save in order to make a large purchase, home or car. While in the United States can borrow and to achieve this goal. These reasons still not fully account for the existence of international differences in the rate of savings. Some economists concluded, finally, that there are just differences in national attitudes towards savings.

In economic books we meet many debate regarding the question of whether an increase in income and in particular. The growing inequality in the distribution of national income increases the level of savings in the national income.

Instability of financial markets

One of the most important factors that influence the policy of stimulating domestic savings has adequate financial environment and financial conditions in the country. That is work on the collection and channeling of savings from savers through financial intermediaries, to the companies that will invest. The instability of the financial markets is not conducive to the growth of national savings. This is because when real interest rates on deposits with variable and low, and often negative. Hence, savers will transfer your money abroad, where they will receive a higher interest rate. Else will your savings be directed to the purchase of unproductive goods, such as gold. In modern economic systems, capital markets offer the possibility of formation of higher rates and weight savings in them. This is because each recipient of money income potential participant in the formation of saving most of it for to offers a variety of options.

Anyone who saves receives compensation in the form of interest or dividends. Therefore, it seems logical that the natural way to increase savings and increase compensation to depositors. To illustrate, assume that anyone who receives a saving interest rate of 5% per annual every penny. Surely it would increase interest rates by say 10%, thought that person more saves. This reasoning had occasionally impact on tax policy in certain countries.

Tips to increase your saving

In fact, we understand that if we wanted to save lot money have sacrificing many things. By cutting down enjoy in vacation, eating less and buying less clothes. Sacrificing all these things saving money will be more effective. You may try following point to help you save money.

Be healthy – Eat healthy foods and do more exercise can prevent from visit doctor. As everybody knows, sickness will bring a lot of financial problem including health insurance. Health insurance installment plan will increase if health checked not healthy as expected.

Reduce loans – Apply loan from licensed moneylender is good option to reduce loans. Those moneylenders can provide loan to consolidate all your debt. Such as credit card delay payment or using credit card cash advanced will cause the interest charges is high. This is because interest rate charge on credit card is higher comparing licensed moneylender.

Credit rating – Improving your credit rate will save you a small amount of savings. Consequently, the savings can achieve thousands of dollars.

Mobile phone bills – Subscribe cell phone by using prepaid package. Decrease the usage of your cell phone bills as much as possible. In fact using prepaid is much convenient and can save a lot of money.

Online shopping – Most of the online shop offers discounts and accumulate credit to rebate. By using online shopping can help you save a lot of money and time. Instead of travel out to buy things that you necessary.


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