Zur Theorie des Sparens in einer wachsenden Wirtschaft

Abstract

On the Theory of Saving in a Growing Economy

To summarize what I consider the important conclusions from my deliberatıons: 1. Saving in most households, namely the low-income ihouseholds, consists almost exclusively in saving for consumption purposes, saving for a security reserve and saving for an owner-occupied home. 2. This form of saving is not really directly oriented to creation of wealth in the sense of a participation in productive assets and therefore does not aim primarily at returns from assets. Hence the interest rate can by no means be ascribed the often assumed great importance for the amount of savings; moreover, even saving at a negative real interest rate can be demonstrated to be rational. 3. More uniform distribution of wealth cannot be expected from such saving, since the real purpose is not accumulation of wealth and in addition there is neither the possibility nor the prime intention of realizing high yields. 4. The actual determinant of this form of saving is the decision of the individual household on what it believes it can, or must, provide for itself. Hence this form of saving is governed essentially by the amount of real disposable income. 5. In accordance with the relative income hypothesis, the described approaches can prove the long-term constancy of the average propensities to consume and save, and explain the difference from the short-term consumption function. 6. T'he interest rate for money and the rate of price increases constitute certain constraints which, depending on income, make saving impossible beyond a certain threshold. The resulting decline in saving from certain inflation rate onwards should not be imputed to impaired trust in the currency, which would necessarily lead up to a cumulative process. 7. Within certain limits it can be assumed that the saving explained here increases as the real interest rate declines, so that an expected higher inflation rate results in more and an expected lower inflation rate in less saving, and that an expected inflation rate thus stabilizes itself.