Thread started: Feb 18 2008, 7:59 AM EST
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According to theory, individuals earning higher incomes should have a higher marginal propensity to save. As we learned in class, however, as incomes have risen in the United States, savings rates have actually fallen closer to zero. Why don't Americans save like Asians do? And does savings matter, anyway?
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RE: Why don't Americans save?
By: ,
Mar 3 2009, 3:25 AM EST
Saving is so important because it gives the people that security that they need, in times where the economy isn't doing very well, just like now. Asians are very careful with their money because they can't or don't want to predict what will happen in the future. americans on the other hand are risk-takers. They spend their money without much concern about the future. Also as incomes do increase, maybe because of tax cuts, americans feel wealthier and therefore are more willing to spend money
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