Is there a revolution in American saving?

John Tatom

MPRA Paper from University Library of Munich, Germany

Abstract: The personal saving rate spiked up to an unusually high level in 2008 and spring 2009, prompting many observers to suggest that the financial crisis has created a new thrift ethic, reversing decades of decline in U.S. saving to near zero. The depth of the recent financial and economic crisis has prompted many to believe that there has been a sea change in attitudes toward regulation, independence and personal responsibility and that a permanent rise in saving behavior has taken place. There are many reasons for personal saving to have surged recently, however, and most of them are very temporary, especially the Obama tax cut, so it is not likely that the personal saving rate will persist at a higher level. Betting on fundamental changes in behavior is a risky, dare we say foolish, business in the absence of more fundamental change in the economic environment or incentives.

Keywords: Saving; Financial crisis; Personal saving rate (search for similar items in EconPapers)
JEL-codes: E21 E62 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-mac and nep-pke
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Published in Networks Financial Institute Reseacrch Buzz 5.5(2009): pp. 1-5

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:16139

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