Overview

Macro economic-inflation consumptionand the savings ratio energy user desiremeasurementAny countries have chance to encounter inflation problem. Inflation means as a factor that could reduce the saving ration. If consumers expected prices to rise, they would bring forward consumption to take advantage of lower prices. For example, during the 1970s, as both inflation and the saving ration rose theories were advanced to explain why inflation could lead to an increase in saving. The most clear or reasonable explanation is that households do not base their consumption decisions about consumption and saving on their money income alone consumption and saving on their money income alone, due to they reduce some capital losses from their income. In particular, they reduce some reduction in the real value of monetary assets caused by inflation. So, inflation could affect the savings ratio, due to gains and losses on loans between households cancel out. It depends on where some households deposit money with banks.How can consumption function explain it has relationship between the savings ratio and inflation have been suggested by some economists ? The reasons may include as below: (1)There may be a link between changes in income and changes in consumption. If consumption during a quarter is related to money income in the previous quarter, then a acceleration ( accumulation) in wages and prices will lead to a fall in real consumption in the quarter following the accumulation, and in a rise in the savings ratio. So, it explains why money incomes and savings will have risen, but real consumption will long fallen. Because the inflation influences the incomes and savings seem rise, but in fact, if the consumption amounts and numbers do not rise when the inflation period. The country's consumers' whose shopping desires or real consumptions do not real rise as the same time in the period. Unless, the country's general consumers can accept to spend much expenditure to buy more number of any things in themselves societies. Otherwise, the real consumption effect will not be achieved in the country.(2)The uncertainty created by a high and unstable rate of inflation could cause people to save more. The degree of uncertainty is difficult to quantify and may not be tied to the inflation rate in a simple linear relationship. So, due to any countries' citizen or consumers or living people who must not predict when inflation will come. Because this uncertain when inflation occurrence reason, many consumers will not change their habit consumption behaviors, such as habit spending much consumers, they won't change their consumption habits to be reduced number or consumption times easily or habit spending less consumers, they won't change their consumption habits to be raised number or consumption times easily. Even, they predict inflation will come as soon. Because inflation predicting feeling will be more uncertain to influence their spending behaviors changing more easily. Unless the country's government can ensure to notice its citizen when inflation will come, then it will influence their shopping times or consumption number to be changed easily.

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