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Substitutability of Savings by Sectors: OECD Experiences


  • Yoichi Matsubayashi

    (Graduate School of Economics, Kobe University)

  • Takao Fujii

    (Graduate School of Economics, Kobe University)


This paper investigates empirically the substitutability of savings among the household, corporate and government sectors in OECD countries. First, theoretical micro-foundations are constructed, wherein, each sector behaves under intertemporal optimization. Second, empirical investigations are conducted based on this theoretical formation. Optimal consumptions is then derived based on the theoretical relationship between household consumption and corporate and government savings. Empirical results indicate that changes in corporate savings marginally offset household savings in OECD countries. This empirical evidence somewhat supports the assertion that households partly pierce the corporate veil and that other factors, such as fluctuations in disposable income and precautionary motives, contribute to the relation between household and corporate savings. However, substitutability of savings between the households and the government is not clearly evident.

Suggested Citation

  • Yoichi Matsubayashi & Takao Fujii, 2012. "Substitutability of Savings by Sectors: OECD Experiences," Discussion Papers 1215, Graduate School of Economics, Kobe University.
  • Handle: RePEc:koe:wpaper:1215

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    More about this item


    Savings by Sectors; Pierce Corporate Veil; Ricardian Equivalence Theorem;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F01 - International Economics - - General - - - Global Outlook

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