Last year China saved about half of its gross domestic product while the United States saved only 13 percent of its national income. The contrast is even starker at the household level—a personal saving rate in China of about 30 percent of household income, compared with a U.S. rate that dipped into negative territory last year (—0.4% of after-tax household income). Similar extremes show up in the consumption shares of the two economies.
Compare the MPC and MPS in the United States and China. Why might they differ?