Tuesday, February 3, 2009

How Much will consumers save?

A follow up article to our Martin Feldstein reading. This economist predicts an equilibrium savings rate by consumers will reach 6-10%
Posted by at

1 comment:

  1. Anonymous2/3/09, 10:26 PM

    I believe the overall predictions of the economists in this article are correct. Because consumer confidence in governmental projects, and private markets is so low, the only first place consumers turn to for a save haven in their bank.
    The accusation that consumer spending is going to jump to ten percent is stretching it, though. The two forces counteracting this are: governmental reactions to the recession, and American style of living. The government has put into works numerous bills, including the new stimulus package, that will slow or stop the increasing in consumer spending and begin the recovery of our economy. The second force driving consumer spending is the lifestyle American consumers have adapted to. Unlike, many other industrialized nations, including much of western Europe, American’s have many more ‘creature comforts’ and most Americans are not willing to give back the comforts they received during the financial boom, thus consumers will return to spending.

    ReplyDelete

Subscribe to: Post Comments (Atom)