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Why aren't developed countries saving?

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Author Info

  • Dobrescu, Loretti I.
  • Kotlikoff, Laurence J.
  • Motta, Alberto

Abstract

National saving rates differ enormously across developed countries. But these differences obscure a common trend, namely a dramatic decline over time. France and Italy, for example, saved over 23% and 19% of national income in 1970, but only 9% and 4% respectively in 2008. Japan saved almost 33% in 1970, but only 7% in 2008. And the U.S. saved around 11% in 1970, but only 1% in 2008. What explains these international and intertemporal differences? Is it demographics, government spending, productivity growth or preferences?

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 56 (2012)
Issue (Month): 6 ()
Pages: 1261-1275

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Handle: RePEc:eee:eecrev:v:56:y:2012:i:6:p:1261-1275

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Web page: http://www.elsevier.com/locate/eer

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Keywords: National saving; Discount factor; Simulated method of moments;

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References

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  1. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2005. "Will China Eat Our Lunch or Take Us Out to Dinner? Simulating the Transition Paths of the U.S., EU, Japan, and China," NBER Working Papers 11668, National Bureau of Economic Research, Inc.
  2. Laurence J. Kotlikoff & Assaf Razin & Robert W. Rosenthal, 1991. "A Strategic Altruism Model In Which Ricardian Equivalence Does Not Hold," NBER Working Papers 2699, National Bureau of Economic Research, Inc.
  3. Enrique G. Mendoza & Vincenzo Quadrini & José-Víctor Ríos-Rull, 2009. "Financial Integration, Financial Development, and Global Imbalances," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 371-416, 06.
  4. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
  5. Newey, W.K. & West, K.D., 1992. "Automatic Lag Selection in Covariance Matrix Estimation," Working papers 9220, Wisconsin Madison - Social Systems.
  6. Hans Fehr & Sabine Jokisch, & Laurence J. Kotlikoff, 2005. "Will China Eat Our Lunch or Take Us to Dinner?—Simulating the Transition Paths of the U.S., E.U., Japan, and China," Working Papers wp102, University of Michigan, Michigan Retirement Research Center.
  7. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," NBER Working Papers 5378, National Bureau of Economic Research, Inc.
  8. Jerry Green & Laurence J. Kotlikoff, 2006. "On the General Relativity of Fiscal Language," Boston University - Department of Economics - Working Papers Series WP2006-036, Boston University - Department of Economics.
  9. Daniel McFadden, 1987. "A Method of Simulated Moments for Estimation of Discrete Response Models Without Numerical Integration," Working papers 464, Massachusetts Institute of Technology (MIT), Department of Economics.
  10. Jonsson, G. & Klein, P., 1995. "Stochastic Fiscal Policy and the Swedish Business Cycle," Papers 592, Stockholm - International Economic Studies.
  11. Boskin, Michael J. & Kotlikoff, Laurence J., 1985. "Public debt and United States saving: A new test of the neutrality hypothesis," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 23(1), pages 55-86, January.
  12. Pakes, Ariel & Pollard, David, 1989. "Simulation and the Asymptotics of Optimization Estimators," Econometrica, Econometric Society, vol. 57(5), pages 1027-57, September.
  13. Andrews, Donald W K, 1991. "Heteroskedasticity and Autocorrelation Consistent Covariance Matrix Estimation," Econometrica, Econometric Society, vol. 59(3), pages 817-58, May.
  14. Lilia Maliar & Serguei Maliar, 1999. "- Heterogeneity In Capital And Skills In A Neoclassical Stochastic Growth Model," Working Papers. Serie AD 1999-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  15. Tauchen, George, 1997. "The Objective Function of Simulation Estimators Near the Boundary of the Unstable Region of the Parameter Space," Working Papers 97-14, Duke University, Department of Economics.
  16. Selahattin Imrohoroglu & Ayse Imrohoroglu & Kaiji Chen, 2006. "The Japanese Saving Rate," American Economic Review, American Economic Association, vol. 96(5), pages 1850-1858, December.
  17. Kaiji Chen & Ayşe İmrohoroğlu & Selahattin İmrohoroğlu, 2007. "The Japanese saving rate between 1960 and 2000: productivity, policy changes, and demographics," Economic Theory, Springer, vol. 32(1), pages 87-104, July.
  18. Gramlich, Edward M, 1989. "Budget Deficits and National Saving: Are Politicians Exogenous?," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 23-35, Spring.
  19. Laurence J. Kotlikoff, 1989. "What Determines Savings?," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611872.
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Blog mentions

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  1. Why aren't developed countries saving?
    by UDADISI in UDADISI on 2012-08-02 01:09:00
  2. [??]??????????????????????
    by himaginary in himaginaryの日記 on 2012-08-03 07:00:00
  3. The Best 10 Economics Papers of 2012
    by UDADISI in UDADISI on 2012-12-13 22:44:00

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