Inflation and the Savings Rate
AbstractThis paper examines two explanations of the observed positive relationship between inflation rates and saving rates in Canada and the United States. Several models are estimated using quarterly time series data from both countries, and the best of these are subjected to a variety of tests. One of the two explanations appears broadly consistent with the data. The observed relationship arises primarily because, in times of inflation, measured income and measured savings overstate the corresponding real and perceived quantities.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 493.
Date of creation: 1982
Date of revision:
Publication status: Published in Applied Economics, 15, 1983
Other versions of this item:
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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- Bulkley, George, 1981. "Personal Savings and Anticipated Inflation," Economic Journal, Royal Economic Society, vol. 91(361), pages 124-35, March.
- Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
- Henri-Paul Rousseau, 1983. "The Dome Syndrome: The Debt Overhanging Canadian Government and Business," Canadian Public Policy, University of Toronto Press, vol. 9(1), pages 37-52, March.
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