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Thursday, May 25, 2006

Interest Rates and Saving

Martin Feldstein says:

The Federal Reserve has reversed its low interest rate policy... It will only be a matter of time until the household saving rate is at least back to the 2.4 per cent level of 2002.

I was curious about this so I plotted the 3-month T-Bill rate against the personal saving rate since 1980 to get a rough idea of the association between the two variables:

Click to enlarge

    Posted by on Thursday, May 25, 2006 at 07:42 PM in Economics, Saving | Permalink  Comments (20)


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