Ewing, B. T. & Payne, J. E. (1998). The long-run
relation between the personal savings rate and consumer sentiment. Financial
Counseling and Planning,
9(1), 89-96.
The Long-Run Relation Between The Personal Savings
Rate
And Consumer Sentiment
Bradley T. Ewing(1)
and James E. Payne(2)
This study examined the long run relationship between the personal
savings rate and the index of consumer sentiment in the United States over
the 1959-1997 period using cointegration analysis. We find that consumer
sentiment and the personal savings rate share a long run equilibrium. The
results suggest that households reduce their savings rate when consumer
sentiment is high, but the two variables do not drift arbitrarily far apart.
The results have implications for long term savings plans and are particularly
important for financial counselors and planners.
Key Words: Saving, Economic well-being, Economic model
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1. Bradley
T. Ewing, Assistant Professor, Department of Economics, Texas Tech
University, Box 41014, Lubbock, TX 79409-1014. Phone: (806) 742-2466. E-mail:
bewing@ttu.edu.
2. James E. Payne, Associate Professor, Department
of Economics and Finance, Eastern Kentucky University, Richmond, KY 40475-3176.
Phone: (606) 622-1769. E-mail: ecopayne@acs.eku.edu.