Stock Market Wealth, Private Saving, and the Current Account in the United States: Should We Worry?
AbstractThe paper investigates by means of cointegration analysis whether the recently observed low levels of private saving and the current account balance in the United States are worrisome in the sense that they cannot be sufficiently explained by determinants which performed well in the past. Stock market wealth of private households is taken into account and turns out to be the main dampening factor of private saving during the nineties. Unlike the current account deficit, which reflects low saving, higher growth with respect to the rest of the world and the high dollar, private saving is much lower than predicted by the model in 1999.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 963.
Length: 36 pages
Date of creation: Dec 1999
Date of revision:
Private Saving; Current Account Balance; Stock Market Wealth; Cointegration;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
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