Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Chinese Saving Puzzle and the Life-Cycle Hypothesis


Author Info

  • Franco Modigliani
  • Shi Larry Cao


China's per capita income ranks below 100th in the world. Its saving rate, however, has been one of the highest worldwide in recent decades. In this paper, we attempt to explain the seeming paradox within the framework of the Life-Cycle Hypothesis developed by Franco Modigliani. The key LCH variables are income and population growth. Our results based on data we put together from official sources show that income growth has been the dominant factor behind the dramatic increase in China's saving rate, as predicted by the LCH. Demographic structure and inflation also had significant impact on the fluctuations of the saving rate.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 42 (2004)
Issue (Month): 1 (March)
Pages: 145-170

as in new window
Handle: RePEc:aea:jeclit:v:42:y:2004:i:1:p:145-170

Note: DOI: 10.1257/002205104773558074
Contact details of provider:
Web page:
More information through EDIRC

Order Information:

Related research



No references listed on IDEAS
You can help add them by filling out this form.


Blog mentions

As found by, the blog aggregator for Economics research:
  1. China's Recent Trade Deficit: Is What You Yuan What You're Gonna Get?
    by Edward Hugh in global economy matters on 2010-04-18 09:59:00
  2. The Second Great Depression Wends Its Way Forward in December
    by Edward Hugh in global economy matters on 2009-01-02 15:19:00
  3. ChinaĆ¢??s Recent Trade Deficit: Is What You Yuan What YouĆ¢??re Gonna Get?
    by Edward Hugh in a fistful of euros on 2010-04-18 08:00:43
  4. The Second Great Depression Wends Its Way Forward in December
    by Edward Hugh in a fistful of euros on 2009-01-02 13:48:43
  5. Travelling Through Latvia In Good Company (Ultra-Wonkish)
    by Edward Hugh in a fistful of euros on 2008-12-24 10:51:43
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:aea:jeclit:v:42:y:2004:i:1:p:145-170. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.