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Japanese Saving Rate

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Author Info
Kaiji Chen (University of Southern California)
Ayse Imrohoroglu (University of Southern California)
Selo Imrohoroglu (University of Southern California)

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Abstract

Japanese and U.S. saving rates have been significantly different over the last forty years. Can a standard growth model explain this difference? The answer is yes. Our results indicate that both an infinite horizon, complete markets setup and an overlapping generations model with incomplete markets are about equally able to generate saving rates that are remarkably similar to the data during 1961-1998. Our quantitative findings identify changes in the growth rate of total factor productivity and the low initial capital stock as the main factors generating the time series behavior of the net national saving rate in Japan. We show that if the Japanese had faced the U.S. TFP and initial conditions, their saving rate would have looked very similar to that of the U.S. households. In other words, it seems that there is nothing peculiar about the Japanese saving behavior.

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Paper provided by EconWPA in its series Macroeconomics with number 0502017.

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Length: 31 pages
Date of creation: 07 Feb 2005
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Handle: RePEc:wpa:wuwpma:0502017

Note: Type of Document - pdf; pages: 31
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Web page: http://129.3.20.41

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Related research
Keywords: Neoclassical Growth Model; Saving Behavior; Total Factor Productivity;

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E - Macroeconomics and Monetary Economics

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References listed on IDEAS
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.:
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  1. R.Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2006. "Saving and interest rates in Japan: Why they have fallen and why they will remain low," Proceedings, Federal Reserve Bank of San Francisco, issue Jun. [Downloadable!]
  2. Hui He & Zheng Liu, 2007. "Investment-specific technological change, skill accumulation, and wage inequality," Working Papers 644, Federal Reserve Bank of Minneapolis. [Downloadable!]
    Other versions:
  3. R. Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2006. "Saving and interest rates in Japan: why they have fallen and why they will remain low," Working Paper Series 2006-39, Federal Reserve Bank of San Francisco. [Downloadable!]
  4. Hui He & Zheng Liu, 2006. "Investment-Specific Technical Change and the Dynamics of Skill Accumulation and Wage Inequality," Emory Economics 0609, Department of Economics, Emory University (Atlanta). [Downloadable!]
  5. Chakraborty, Suparna, 2006. "Amplifying Business Cycles through Credit Constraints," MPRA Paper 1808, University Library of Munich, Germany. [Downloadable!]
  6. R. Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2007. "The Saving Rate in Japan: Why It Has Fallen and Why It Will Remain Low," CIRJE F-Series CIRJE-F-535, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  7. Pierre-Olivier Gourinchas & Olivier Jeanne, 2007. "Capital Flows to Developing Countries: The Allocation Puzzle," NBER Working Papers 13602, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Keisuke Otsu, 2007. "A Neoclassical Analysis of the Postwar Japanese Economy," IMES Discussion Paper Series 07-E-01, Institute for Monetary and Economic Studies, Bank of Japan. [Downloadable!]
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