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The Determinants of Savings: Lessons from Italy

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  • Tullio Jappelli
  • Marco Pagano

Abstract

In most of the postwar period Italy featured an abnormally high saving rate in comparison to that of most other industrialized countries. But this is no longer true. Under any definition, in the last decade the Italian saving rate has fallen below the average of the developed economies. Why was the Italian saving ratio comparatively high and why has its decline been so dramatic? In this paper we consider various potential answers to these questions. We particularly focus on the recent slowdown in productivity growth, the development of credit and insurance markets, and changes in the social security system. In the second part of the paper we use a series of repeated cross-sections from the Survey of Household Income and Wealth in order to determine whether the macroeconomic explanations for the decline in saving are consistent with microeconomic data.

Suggested Citation

  • Tullio Jappelli & Marco Pagano, 1997. "The Determinants of Savings: Lessons from Italy," Research Department Publications 3012, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:3012
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    3. Luigi Ventura & Charles Yuji Horioka, 2020. "The wealth decumulation behavior of the retired elderly in Italy: the importance of bequest motives and precautionary saving," Review of Economics of the Household, Springer, vol. 18(3), pages 575-597, September.
    4. Andrea Butelmann & Francisco Gallego, 2001. "Estimaciones de los determinantes del ahorro coluntario de los hogares en Chile (1988-1997)," Central Banking, Analysis, and Economic Policies Book Series, in: Felipe Morandé & Rodrigo Vergara & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edit (ed.),Análisis Empírico del Ahorro en Chile, edition 1, volume 1, chapter 6, pages 141-190, Central Bank of Chile.
    5. Bojan Srbinoski & Klime Poposki & Patricia H. Born & Valter Lazzari, 2021. "Life insurance demand and borrowing constraints," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 24(1), pages 37-69, March.
    6. Günther Fink & Silvia Redaelli, 2005. "Understanding Bequest Motives An Empirical Analysis of Intergenerational Transfers," DNB Working Papers 042, Netherlands Central Bank, Research Department.
    7. Caterina Mendicino, 2006. "Credit Market and Macroeconomic Volatility," 2006 Meeting Papers 317, Society for Economic Dynamics.
    8. Sinha, Dipendra & Sinha, Tapen, 1998. "Cart before the horse? The saving-growth nexus in Mexico," Economics Letters, Elsevier, vol. 61(1), pages 43-47, October.
    9. Caterina Mendicino, 2005. "Credit Market Development, Asset Prices and Business Cycle," Money Macro and Finance (MMF) Research Group Conference 2005 74, Money Macro and Finance Research Group.

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