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The spirit of capitalism and savings behavior

Author

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  • Heng-fu Zou

    (Policy Research Department, The World Bank
    Institute of Advanced Economic Studies, Wuhan University)

Abstract

This paper presents a capitalist-spirit model of savings by including wealth in the intertemporal utility function. While this model includes the life-cycle model and bequest model as two special cases, it sheds light on why wealth holding has tended to increase with age, why decumulation of wealth after retirement has not happened, and why households with and without children have not shown significant differences in their savings behavior. The capitalist-spirit approach is especially useful for understanding savings by the rich and savings across countries and over time.

Suggested Citation

  • Heng-fu Zou, 1995. "The spirit of capitalism and savings behavior," CEMA Working Papers 79, China Economics and Management Academy, Central University of Finance and Economics.
  • Handle: RePEc:cuf:wpaper:79
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    References listed on IDEAS

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    7. Zou, Heng-fu, 1994. "'The spirit of capitalism' and long-run growth," European Journal of Political Economy, Elsevier, vol. 10(2), pages 279-293, July.
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    More about this item

    Keywords

    Savings puzzle; Capitalist spirit; Wealth accumulation;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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