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Issues in National Savings Policy

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  • Lawrence H. Summers

Abstract

This paper reviews a number of issues relating to the policy goal of increasing national savings. The first section considers the measurement and definition of national savings. Comparisons of current US savings rates with those of other countries and with the past US experience are presented. The second section considers possible avenues through which public policy can increase natianal savings. While most discussion has centered on the effects of changes in the rate of return received by savers, this is far from the only channel through which policy can effect savings. I conclude that changes in public savings or dissaving through budget surpluses or deficits are the most potent and reliable policy tool for altering the saving rate. The third section of the paper examines a crucial savings policy question. Where will extra savings go? Both empirical estimates and econometric model simulations suggest will find their way into increased plant and equipment investment. A major effect of increased savings would be to reduce capital inflows and improve American competitiveness.

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  • Lawrence H. Summers, 1985. "Issues in National Savings Policy," NBER Working Papers 1710, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1710
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    References listed on IDEAS

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    1. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    2. Summers, Lawrence H, 1981. "Capital Taxation and Accumulation in a Life Cycle Growth Model," American Economic Review, American Economic Association, vol. 71(4), pages 533-544, September.
    3. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    4. N. Gregory Mankiw & Lawrence H. Summers, 1984. "Are Tax Cuts Really Expansionary?," NBER Working Papers 1443, National Bureau of Economic Research, Inc.
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    Cited by:

    1. B. Douglas Bernheim & John Karl Scholz, 1993. "Private Saving and Public Policy," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 73-110, National Bureau of Economic Research, Inc.
    2. Steven F. Venti & David A. Wise, 1990. "Have IRAs Increased U. S. Saving?: Evidence from Consumer Expenditure Surveys," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 661-698.
    3. Kerttula, Anne, 1989. "Capital income taxation and household saving," Research Discussion Papers 29/1989, Bank of Finland.
    4. Lawrence H. Summers, 1986. "Debt problems and macroeconomic policies," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 165-208.
    5. David F. Bradford, 1989. "Market Value Vs. Financial Accounting Measures of National Saving," NBER Working Papers 2906, National Bureau of Economic Research, Inc.
    6. repec:idb:brikps:377 is not listed on IDEAS
    7. van Wijnbergen, Sweder, 1988. "Monopolistic competition, credibility and the output costs of disinflation programs An analysis of price controls," Journal of Development Economics, Elsevier, vol. 29(3), pages 375-398, November.
    8. repec:zbw:bofrdp:1989_029 is not listed on IDEAS
    9. Michael J. Boskin, 1987. "Future Social Security Financing Alternatives and National Saving," NBER Working Papers 2256, National Bureau of Economic Research, Inc.
    10. Anand Chandavarkar, 1993. "Saving Behaviour in the Asian‐Pacific Region," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 7(1), pages 9-27, May.
    11. Michael J. Boskin, 1987. "Concepts and Measures of Federal Deficits and Debt and Their Impact on Economic Activity," NBER Working Papers 2332, National Bureau of Economic Research, Inc.
    12. Corbo, Vittorio & Fischer, Stanley, 1991. "Adjustment programs and Bank support : rationale and main results," Policy Research Working Paper Series 582, The World Bank.
    13. Kerttula, Anne, 1989. "Capital income taxation and household saving," Bank of Finland Research Discussion Papers 29/1989, Bank of Finland.

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