Time Allocation of Resources: Whether to Save or Spend

Xingyun Peng

Chapter 4 in Financial Theory:Perspectives from China, 2015, pp 71-89 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In Chapter 2, we learned that finance is a bridge between the surplus and shortage of funds. As such, capital surplus is the foundation of finance. Savings is the original source of surplus, as well as one of the most important aspects of a rationally allocated lifetime income. After receiving a salary or bonus, the first decision you must make is what to do with this income. In other words, how much can you spend and how much should go towards future savings? This is the time allocation of resources. Savings has a great influence on the macroeconomy and is also an important aspect of our personal finances. This chapter will mainly introduce readers to the factors that motivate people to save and that influence people's decisions to save, as well as the reasons why people decide to spend or save.

Keywords: Monetary Economics; Financial Markets; Monetary Policy; Financial System; Financial Development (search for similar items in EconPapers)
Date: 2015
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