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The aging society, savings rates, and regional flow of funds in Japan

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  • Fukuda, Shin-ichi
  • Okumura, Koki

Abstract

This study examines the impact of population aging on regional savings rates in Japan, with particular attention to the regional flow of funds. Population aging has a positive impact on the average savings rate when the working-age population is large, it but has a negative impact when the working-age population decreases. Our empirical results, based on prefecture-level panel data, support the theoretical implication. After the mid-1990s, the working-age population declined, and the retired age population increased in many prefectures. As a result, population aging, which had a positive effect on the regional savings rate until the mid-1990s, came to have a negative effect thereafter. The empirical results suggest that in rural economies where deposits exceeded loans in the past, deposits are expected to decline due to the aging of society, resulting in a shortage of funds in the near future.

Suggested Citation

  • Fukuda, Shin-ichi & Okumura, Koki, 2021. "The aging society, savings rates, and regional flow of funds in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:jjieco:v:62:y:2021:i:c:s0889158321000447
    DOI: 10.1016/j.jjie.2021.101165
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    Cited by:

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    6. Haidong Yuan & Chin-Hong Puah & Josephine Tan-Hwang Yau, 2023. "How Does the Ageing Population Affect China's Household Savings Rate? Empirical Study Based on China's Micro Household Data," Business and Economic Research, Macrothink Institute, vol. 13(4), pages 227-240, December.

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    More about this item

    Keywords

    Population aging; Savings rate; Regional flow of funds; Regional banks;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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