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Economic Commentary

Increasing National Saving: Are IRAs the Answer?

Saving, so advised the proverbial ant to the spendthrift grasshopper, allows an individual to “prepare today for the wants of tomorrow.” Likewise for an economy, national saving provides resources for capital accumulation, expanding the economy’s future productive capacity and hence its future potential output. The precipitous decline in average saving rates during the 1980s, as measured by the National Income and Product Accounts (NIPA), has convinced many that we have become a nation of grasshoppers in need of policies that will turn us back into a nation of ants.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Altig, David, and Katherine Samolyk. 1991. “Increasing National Saving: Are IRAs the Answer?” Federal Reserve Bank of Cleveland, Economic Commentary 9/1/1991.