The economic concepts relating to savings deal with the various economic phenomena that are related to savings and have an effect on it. In practicality there are a lot of economic concepts like taxes, income and others that have an effect on savings.
Personal Disposable Income
The terms personal disposable income and savings are closely related. If a person has a higher level of personal disposable income it implies that he is saving pretty well. The term personal disposable income means the amount of money an individual retains after he has made all his necessary expenditure. This amount can then either be saved or invested into other forms.
Wealth Effect
Wealth effect is an economic phenomenon whereby a person spends when the real value of the properties owned by him increases. This has an adverse effect on the savings of that individual who is making the expenditure.
Paradox of Thrift
The paradox of thrift is a crucial economic theory. According to the paradox of thrift at times of financial crises people save more than what they do when the economic condition is stable. The primary explanation behind this occurrence is the fact that the people demand less at times of economic recession. This theory tries to explain the nature and tendency of savings.
Aggregate Saving
The term aggregate saving means the total of savings that is made by the people of a particular geographic location. This concept also tries to analyze the savings habits of people according to various concepts like the age of the people.
Income Inequality and Concentration
At certain places it is seen that the income is getting concentrated at the hands of a few influential people. This in turn leads to inequality in the pattern of income among the people of that place. All these have an adverse effect on the savings of families, which also impact the savings of that particular place.
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