Marginal savings rate

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The marginal savings rate (also: marginal tendency to save , Grenzrate zum Sparen ) describes the proportion of income that private households in an economy save on the next additional (marginal) income unit , i.e. H. do not consume (spend). It is fundamental to the development of the Keynesian total model and the multiplier .

The marginal propensity to save can be derived from the consumption function. In a simple (model) economy without the state and foreign trade, the national income can be represented as follows:

(a) , d. That is, the entire national income ( ) goes to the private sector, which consumes ( ) and saves ( ) it.

Both consumption and saving can thus be assumed to be dependent on national income, i.e. This means that consumption increases as income increases:


describes the so-called autonomous consumption , which is carried out with an income of zero ( ) (saving, e.g. by selling assets such as securities or residential property). For every increase in income by one currency unit, consumption increases by currency units. If the propensity to consume is marginal , then consumption increases by € 0.85 with every increase in income of € 1.00:

The marginal propensity to consume is less than one, i.e. This means that if the income is increased by one euro, a share is spent on consumption. The rest is saved because of the saving function

(c) applies.

By substituting (b) in (c) you get the marginal savings rate


or in other words:

In the example, the marginal propensity to save is .