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The Decline in Private Saving Rates in the 1990s in OECD Countries: How Much Can be Explained by Non-Wealth Determinants?

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  • Alain de Serres
  • Florian Pelgrin

Abstract

The substantial decline in private-sector saving rates observed in several OECD countries in the late 1990s coincided in several cases with a sharp increase in household financial net worth. This was seen by many observers as evidence that the strong rise in equity and residential property prices during the late 1990s had been treated by households as a permanent increase in wealth, leading to an unsustainable drop in saving and raising fears of an eventual negative wealth effect. Applying estimation techniques for systems of dynamic panel equations, this paper looks at basic determinants of private saving for a sample of 15 OECD countries and finds that the sharp decline in saving observed after 1995 can be largely explained, even in a post-sample fashion, by fundamentals other than financial wealth. Among the determinants, the rise in public-sector saving is found to have contributed the most to the decline in private saving between 1995 and 2000. Based on this ... La baisse des taux d'épargne privée durant les années 1990s dans les pays de l'OCDE : La contribution des déterminants autres que la richesse? La baisse substantielle des taux d’épargne privée observée dans plusieurs pays de l’OCDE durant la fin des années 1990 a coincidé dans bien des cas avec une forte hausse de la richesse financière nette des ménages. Ce phénomène fut interprété par plusieurs analystes comme une indication que la forte augmentation des valeurs mobilières et immobilières durant cette période fut traitée par les ménages comme une hausse permanente de la richesse, entraînant une baisse non-soutenable de l’épargne, faisant ainsi surgir des craintes d’un éventuel effet de richesse négatif. A l’aide de l’application de techniques d’estimations pour un panel d’équations dynamiques, cette étude examine les principaux déterminants de l’épargne privée pour un échantillon de 15 pays de l’OCDE et trouve que la baisse de l’épargne observée après 1995 peutêtre largement expliquée par des déterminants fondamentaux autres que la richesse financière, y compris en période hors échantillon. Parmi les ...

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 344.

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Date of creation: 03 Dec 2002
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Handle: RePEc:oec:ecoaaa:344-en

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Keywords: private saving; panel estimates; wealth effects; épargne privée; estimations de panel; effet de richesse;

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Cited by:
  1. Benjamin Wong & Kam Ki Tang, 2010. "The Ageing, Longevity and Crowding Out Effects on Private and Public Savings," CAMA Working Papers 2010-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. M. Castro Campos & C. Kool & J. Muysken, 2013. "Cross-Country Private Saving Heterogeneity and Culture," De Economist, Springer, Springer, vol. 161(2), pages 101-120, June.
  3. Clovis Kerdrain & Isabell Koske & Isabelle Wanner, 2010. "The Impact of Structural Policies on Saving, Investment and Current Accounts," OECD Economics Department Working Papers 815, OECD Publishing.
  4. Gatt, William, 2014. "The determinants of household saving behaviour in Malta," MPRA Paper 57707, University Library of Munich, Germany.
  5. Paul Hiebert, 2006. "Household Saving and Asset Valuations in Selected Industrialised Countries," RBA Research Discussion Papers, Reserve Bank of Australia rdp2006-07, Reserve Bank of Australia.
  6. Clovis Kerdrain & Isabell Koske & Isabelle Wanner, 2011. "Current Account Imbalances: can Structural Reforms Help to Reduce Them?," OECD Journal: Economic Studies, OECD Publishing, OECD Publishing, vol. 2011(1), pages 1-44.
  7. Riccardo De Bonis & Daniele Fano & Teresa Sbano, 2013. "Household aggregate wealth in the main OECD countries from 1980 to 2011: what do the data tell us?," Questioni di Economia e Finanza (Occasional Papers) 160, Bank of Italy, Economic Research and International Relations Area.
  8. Aleksandra Kolasa & Barbara Liberda, 2014. "Determinants of saving in Poland: Are they different than in other OECD countries?," Working Papers 2014-13, Faculty of Economic Sciences, University of Warsaw.
  9. Afonso, António & Rault, Christophe, 2008. "Budgetary and external imbalances relationship: a panel data diagnostic," Working Paper Series, European Central Bank 0961, European Central Bank.
  10. Maria Belén Zinni, 2013. "Identifying Drivers for the Accumulation of Household Financial Wealth," CEIS Research Paper, Tor Vergata University, CEIS 264, Tor Vergata University, CEIS, revised 13 Feb 2013.
  11. Martha A. Starr, 2006. "Macroeconomic dimensions of social economics: Saving, the stock market, and pension systems," Working Papers, American University, Department of Economics 2006-09, American University, Department of Economics.
  12. Volker Meinhardt & Katja Rietzler & Rudolf Zwiener, 2009. "Konjunktur und Rentenversicherung - gegenseitige Abhängigkeiten und mögliche Veränderungen durch diskretionäre Maßnahmen," IMK Studies 03-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  13. Jorgensen, Ole Hagen, 2011. "Macroeconomic and policy implications of population aging in Brazil," Policy Research Working Paper Series 5519, The World Bank.
  14. Shahbaz, Muhammad & Nawaz, Kishwer & AROURI, Mohamed El Hedi & Teulon, Frédéric, 2013. "Does The Keynesian Absolute Income Hypothesis Exist in Pakistan?," MPRA Paper 47923, University Library of Munich, Germany, revised 01 Jul 2013.
  15. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers, School of Economics, University of Wollongong, NSW, Australia wp09-10, School of Economics, University of Wollongong, NSW, Australia.
  16. El Mekkaoui de Freitas, Najat & Martins, Joaquim Oliveira, 2008. "Consumption Structure, Welfare Goods and Retirement Income: Linking the Ageing Puzzles," Economics Papers from University Paris Dauphine 123456789/2343, Paris Dauphine University.
  17. Andreas Freytag & Sebastian Voll, 2013. "Institutions and savings in developing and emerging economies," Public Choice, Springer, Springer, vol. 157(3), pages 475-509, December.

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