Marginal Propensity to Save (MPS) Calculator

What is the Marginal Propensity to Save?

The Marginal Propensity to Save (MPS) represents the fraction of each additional dollar of income that a household saves rather than spends. It is the complement of the Marginal Propensity to Consume (MPC), so MPC + MPS always equals 1.

MPS in Keynesian Economics

John Maynard Keynes introduced MPS as part of his consumption function theory. A higher MPS means more saving and less consumption, which can slow economic growth during recessions but build household financial resilience.

Key Takeaways

• MPS ranges from 0 to 1 — 0 means all income is spent; 1 means all income is saved
• Higher-income earners typically have higher MPS values
• Paradox of thrift — If everyone saves more simultaneously, aggregate demand falls
• The tax multiplier is always negative and smaller than the spending multiplier