Department Chair

Frederick Floss, Ph.D., Chair and Professor of Economics & Finance

Date of Award

5-2019

Access Control

Open Access

Degree Name

Applied Economics, M.A.

Department

Economics and Finance Department

Advisor

Theodore F. Bryley, Ph.D., Professor of Economics & Finance

Department Home page

http://economics.buffalostate.edu/

First Reader

Theodore F. Bryley, Ph.D., Professor of Economics & Finance

Second Reader

Frederick Floss, Ph.D., Chair and Professor of Economics & Finance

Third Reader

Xingwang Qian, Ph.D., Professor of Economics & Finance

Abstract

The personal savings rate is an unsettling subject, because every economist has distinctive opinions on the determinants of consumption, saving and borrowing behaviors of households. For instance, many individuals assume that there is a positive relationship between real disposable income and the personal savings rate. In other words, saving amongst households have increased with the growth of household wealth. On the other hand, some individuals deem that there is an inverse relationship between both variables, so much that this topic has always demanded further research to be completed. Because of my awareness and experience relating to this topic, I have chosen to examine this question. This paper will review the effect and significance of the savings rate by analyzing real disposable income, real household net worth, interest rates, and labor productivity. I will make predictions on the results. I am going to study the positive or negative outcomes between them through data examination and analysis. This thesis will also compare the data and results of the households in the United States between 1980 and 2017. This will allow us to determine if these variables are the major determinants of the personal saving rate.

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