Question: Why are savings so important for economic growth? If there are no savings, what would that mean for an economy? See if you can use the macroeconomics definition for a very simple economy where Y = C + I to explain the significance of total savings to economic growth (and also explain, then, the significance of the savings rate, s, which is simply equal to the ratio S/Y, that is to the percent of an economy's total GDP that is saved). Definitions: Y is total GDP; C is total consumption; I is gross investment; S is total savings.