What encourages households to consume?

We seek to identify what influences the household savings rate to find out what governments could do today to encourage households to consume. Possible determinants of the household savings rate include: Real interest rates; The unemployment rate; Wealth; Inflation; Income growth; Demographics. We find that the household savings rate is determined: In the United States, by unemployment, wealth, income growth and demographics; In the euro zone, by the real interest rate, wealth and demographics. To encourage households to consume, governments must therefore prevent unemployment from rising (United States), keep real interest rates low (euro zone) and boost financial and real estate asset prices (United States and euro zone).