# Questions tagged [saving]

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47 views

### What cognitive biases reduce savings?

In Thinking Fast and Slow Kahneman explains that people can sometimes save less because they underestimate the future benefit to themselves because they view present and future self differently. I ...
36 views

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### Does savings lead to investment in physical capital?

In the introductory macroecon textbook I'm reading, it's made clear that savings=investment. Mathematically, this makes sense to me. However, I'm having trouble understanding the qualitative ...
549 views

### Intuition Behind the Definition of Prudence?

I'm having trouble seeing why an agent is said to exhibit "prudence" when u'''($\cdot$) > 0. How does having a utility function with a strictly positive third derivative make an agent act "prudently"? ...
8k views

### What's the difference between the Life Cycle Hypothesis and Permanent Income Hypothesis?

Would it be correct to say that the Permanent Income Hypothesis (PIH) stipulates that current consumption decisions are made based on future income projections/expectations, while the Life Cycle ...
69 views

### Monthly savings plans

Monthly savings plans in stocks or funds are typical investments for many people. On aggregate, these plans generate a large demand on the underlying assets, often around the end/beginning of a month. ...
45 views

### Change in optimal savings due to increased risk

Currently I am working out advanced micro problems that deal with household's optimal savings behavior. Although I think I understand the material quite well, I am not sure about the specific detail ...
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I understand most of the reasoning, but don't understand what the actual paradox here is, as I believe there can be up to three potential paradoxes: individuals increase savings when they should be ...
33 views

### Is lowered probability of spending equals savings? [closed]

This a really basic one and logic says: Yes given enough iterations. But I am looking for validation Situation: There is a 7% probability of expenses of 1000 occurring. I have a tool that then ...
317 views

### Why the GDP does not decrease even when we are saving from our income?

When we are saving from our income then we don't consume as mush as we earn. So the GDP should decrease as well as the income but this does not happen. Why?
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### Is investment a type of saving or expenditure

I am confused that if investment is a type of saving or a expenditure .if investment is a type of expenditure then is saving is what is left after subtracting consumption and investment from income
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### Locating Sweden's Net Savings Rate, Public Saving, Private Saving, and Corporate Savings Rates?

I'm looking at the savings rates for Sweden and would first like to better understand the breakdown between Gross National Savings, and Net Savings? I've looked around and still haven't found an ...
106 views

### Is there an economic theory of why people like to hold on to wealth?

It seems to me that many people work to become wealthy, but not because they want to consume all that wealth. Many people give it away, other's don't, but still they do not spend it. You hear about ...
213 views

### Can savings and poverty coexist?

Many governments try to decrease savings in the economy so that recessions do not occur. Does it make sense for savings and poverty to coexist though at significant scales? Let's say a population was ...
517 views

### Does dollar cost averaging actually have any advantage over one time investment?

Some banks promote savings plans by stating that investing a fixed amount of money in regular time intervals minimizes the average buying price or the downside risk (dollar cost averaging). Since the ...
38 views

### How does Global Saving Glut flood the market with cash?

When I was browsing the internet last night, I read a couple articles on the Global Saving Glut. And many has ascribed it to be a cause of US financial crsis. My question is how so? The articles argue ...
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### Diagram with axes $r$ and $S,I$

In the figure below, I have a coordinate system where $r$ depends on $I$ or $S$, but I do not completely understand why I can have multiple functions inside this coordinate system. Why can I write \$S(...
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### Why does savings equal investment (scenario)?

Scenario 1: There's an economy of two people (Joe and Amanda). Joe buys a 500 dollar car from Amanda (which she made herself from raw materials in her back yard). Amanda takes the 500 dollars and ...