Savings ratio
Definition
The
savings ratio is an
economics term that refers to the proportion of
income which is saved, usually expressed for household savings as a percentage of total household disposable_income. It can be calculated
gross or net, when calculated net, a
deduction is made for the
depreciation of fixed assets. The ratio differs considerably over time and between countries. The savings ratio is dependant on: The proportion of older people, as they have less motivation and capability to save; the
tax system, it can encourage or discourage saving; the rate of inflation, expectations of rising prices encourage people to spend now.