The effect of interest-rate changes on household saving and consumption: a survey
AbstractDirect estimates of the interest elasticity of saving suffer from several serious problems. As an alternative, this survey uses an indirect approach that combines models of individual behavior with estimates of certain features of individuals' preferences. The paper examines the effect of interest-rate changes on the consumption and saving of people who follow the lifecycle model, who plan to leave bequests, who save to reach a fixed target, and who have short planning horizons. The models that likely describe the behavior of the people who account for most of aggregate saving imply positive interest elasticities of saving.
Download InfoIf 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.
Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 96-27.
Date of creation: 1996
Date of revision:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldstein, Martin, 1995.
"Fiscal policies, capital formation, and capitalism,"
European Economic Review,
Elsevier, vol. 39(3-4), pages 399-420, April.
- Martin Feldstein, 1994. "Fiscal Policies, Capital Formation, and Capitalism," NBER Working Papers 4885, National Bureau of Economic Research, Inc.
- Eric M. Engen & William G. Gale & John Karl Scholz, 1994. "Do Saving Incentives Work?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 85-180.
- Emilio Fernandez-Corugedo, 2004. "Consumption Theory," Handbooks, Centre for Central Banking Studies, Bank of England, number 23.
- John M. Roberts, 2007. "Learning, Sticky Inflation, and the Sacrifice Ratio," Kiel Working Papers 1365, Kiel Institute for the World Economy.
- B. Douglas Bernheim, 1999.
"Taxation and Saving,"
NBER Working Papers
7061, National Bureau of Economic Research, Inc.
- Ana María Iregui & Ligia Alba Melo B., 2009.
"La transmisión de la política monetaria sobre el consumo en presencia de restricciones de liquidez,"
BORRADORES DE ECONOMIA
005254, BANCO DE LA REPÚBLICA.
- Ana María Iregui B. & Ligia Alba Melo B., . "La transmisión de la política monetaria sobre el consumo en presencia de restricciones de liquidez," Borradores de Economia 547, Banco de la Republica de Colombia.
- Engelhardt, Gary V. & Kumar, Anil, 2007.
"Employer matching and 401(k) saving: Evidence from the health and retirement study,"
Journal of Public Economics,
Elsevier, vol. 91(10), pages 1920-1943, November.
- Gary V. Engelhardt & Anil Kumar, 2007. "Employer matching and 401(k) saving: Evidence from the health and retirement study," NBER Chapters, in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 1920-1943 National Bureau of Economic Research, Inc.
- Gary V. Engelhardt & Anil Kumar, 2006. "Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study," DNB Working Papers 079, Netherlands Central Bank, Research Department.
- Gary V. Engelhardt & Anil Kumar, 2006. "Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study," NBER Working Papers 12447, National Bureau of Economic Research, Inc.
- Gary V. Engelhardt & Anil Kumar, 2004. "Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study," Working Papers, Center for Retirement Research at Boston College 2004-18, Center for Retirement Research.
- Douglas W. Elmendorf & Louise M. Sheiner, 2000. "Should America save for its old age? Population aging, national saving, and fiscal policy," Finance and Economics Discussion Series 2000-03, Board of Governors of the Federal Reserve System (U.S.).
- Power, Laura & Rider, Mark, 2002. "The effect of tax-based savings incentives on the self-employed," Journal of Public Economics, Elsevier, vol. 85(1), pages 33-52, July.
- Douglas W. Elmendorf & Louise M. Sheiner, 2000. "Should America Save for Its Old Age? Fiscal Policy, Population Aging, and National Saving," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 57-74, Summer.
- Jonathan Gruber, 2006. "A Tax-Based Estimate of the Elasticity of Intertemporal Substitution," NBER Working Papers 11945, National Bureau of Economic Research, Inc.
- Sebastian Barnes & Garry Young, 2003. "The rise in US household debt: assessing its causes and sustainability," Bank of England working papers 206, Bank of England.
- Junning Cai, 2003. "Fundamental Paper Wealth and Monetary Policy," Macroeconomics 0309001, EconWPA.
- Michael J. Keen & Christos Kotsogiannis, 2002. "Does Federalism Lead to Excessively High Taxes?," American Economic Review, American Economic Association, vol. 92(1), pages 363-370, March.
- Smith, Douglas, 2001. "International evidence on how income inequality and credit market imperfections affect private saving rates," Journal of Development Economics, Elsevier, vol. 64(1), pages 103-127, February.
- Junning Cai, 2003. "Asset Prices and Monetary Policy: Some Notes," Macroeconomics 0305006, EconWPA, revised 13 May 2003.
- Roy Cromb & Emilio Fernandez-Corugedo, 2004. "Long-term interest rates, wealth and consumption," Bank of England working papers 243, Bank of England.
- Árvai, Zsófia & Menczel, Péter, 2001.
"A magyar háztartások megtakarításai 1995 és 2000 között
[The savings of Hungarian households between 1995 and 2000]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 93-113.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs).
If references are entirely missing, you can add them using this form.