Stock Market Wealth, Private Saving, and the Current Account in the United States: Should We Worry?
The paper investigates by means of cointegration analysis whether the recently observed low levels of private saving and the current account balance in the United States are worrisome in the sense that they cannot be sufficiently explained by determinants which performed well in the past. Stock market wealth of private households is taken into account and turns out to be the main dampening factor of private saving during the nineties. Unlike the current account deficit, which reflects low saving, higher growth with respect to the rest of the world and the high dollar, private saving is much lower than predicted by the model in 1999.
|Date of creation:||Dec 1999|
|Date of revision:|
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- Schimmelpfennig, Axel, 1997. "Die deutsche Vereinigung und das Leistungsbilanzdefizit: Eine ökonometrische Analyse der USA und Deutschlands," Kiel Working Papers 788, Kiel Institute for the World Economy (IfW).
- Scheide, Joachim, 1984. "Geldpolitik, Konjunktur und rationale Erwartungen," Open Access Publications from Kiel Institute for the World Economy 378, Kiel Institute for the World Economy (IfW).
- Carsten-Patrick Meier, 1997. "Assessing convergence to purchasing power parity: A panel study for ten OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(2), pages 297-312, 06.
- Meier, Carsten-Patrick, 1997. "Assessing convergence to purchasing power parity : a panel study for ten OECD countries," Open Access Publications from Kiel Institute for the World Economy 1719, Kiel Institute for the World Economy (IfW).
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