Household savings and investment

Abstract

The paper deals with household savings and investment functions. The institutional features of the household economy in the world economy are presented in terms of their place and role in the national economies. The specific household investment activities are analyzed in the context of strategic financial choices. Household activities imply a choice between various behavioral imperatives. The search for appropriate areas to invest temporarily free cash in order to meet household needs influences this choice. The significance of a system of contributing institutions is shown to facilitate these processes. As the authors argue, the economy should encourage the system of institutions, favorable for stimulating the household investment activities. It appears crucial to stimulate household investments in various economic assets. This study presents a comparative analysis of the Russian, Kazakh, Belarusian, Armenian, Kyrgyz, and American household investment activities. Worldwide experience shows that similar tendencies occur, which characterize households investment activities in different countries. The authors identified the differences in household living standards, incomes and investments among the countries. As the research findings suggest, low-income households prefer risk-free investments. Recommendations are made on improving institutional instruments to stimulate households to choose a predominant financial strategy of saving.