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The influence of housing and durables on personal saving

Author

Listed:
  • Leah M. Cook
  • Richard W. Kopcke
  • Alicia H. Munnell

Abstract

The rate of national saving declined sharply in the 1980s. Some of the explanations for this puzzling performance have considered the influence of capital gains, a reduction in the need for precautionary saving, a decline in the need for retirement saving, the effect of slower income growth, and a host of other factors. ; This article explores the relationship between personal saving and the treatment of owner-occupied housing and consumer durable goods in the national income and product accounts. It examhaes the potential consequences of understating the returns on owner-occupied houses and overstating the consumption of services of durable goods. The article concludes that the greater value of homeowners investment in their residences after the 1970s and, to a lesser extent, rising outlays for consumer durable goods in the 1980s, depressed reported personal saving during the last decade, as the national accounts underestimated income and overestimated consumption.

Suggested Citation

  • Leah M. Cook & Richard W. Kopcke & Alicia H. Munnell, 1991. "The influence of housing and durables on personal saving," New England Economic Review, Federal Reserve Bank of Boston, issue Nov, pages 3-16.
    • Handle: RePEc:fip:fedbne:y:1991:i:nov:p:3-16
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    File URL: http://www.bostonfed.org/economic/neer/neer1991/neer691a.pdf
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    References listed on IDEAS

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    Cited by:

    1. J. Steindl, 1998. "Capital gains in economic theory and national accounting," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(207), pages 435-449.
    2. Leah M. Cook & Alicia H. Munnell, 1991. "Explaining the postwar pattern of personal saving," New England Economic Review, Federal Reserve Bank of Boston, issue Nov, pages 17-28.
    3. J. Steindl, 1998. "Capital gains in economic theory and national accounting," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(207), pages 435-449.

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    Saving and investment;

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