Check out FRED's graph of US personal savings rates. Assignment:
1. What happens to savings rates during a recession? Remember that the 1990 and 2001 recessions were very mild compared to the other recessions. What happened to personal savings during the Great Depression?
2. What has been the savings rate trend since 1982? Why? (I don't have any great theories, but perhaps you can come up with something.)
3. What would the theory of Ricardian Equivalence predict?
4. Would did Reagan's supply-side economic theories predict would be the impact of lower marginal tax rates?
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