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Measuring Saving Rates in New Zealand: An Update

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Abstract

This paper reviews the flow approach (income less consumption) to measuring saving and the associated trends in sectoral saving rates for New Zealand, as derived from the national accounts. It also presents estimates for the household sector, of the stock measure of savings (changes in net wealth). The latter estimates are found to be consistently greater than the flow measures of household savings. Finally a series of adjustments are made to the flow measures of household and national saving rates. These include adjustment to the boundary between consumption and investment, the impact of inflation and the role of the New Zealand Superannuation Fund. As a result the adjusted measure of net national saving is found, on average to be some 10 percentage points of GDP higher than the raw measure. The associated estimate of the level of adjusted net foreign liabilities is on average 2 percent of GDP lower than the raw data. bilateral exchange rate movements.

Suggested Citation

  • Emma Gorman & Grant M Scobie & Yongjoon Paek, 2013. "Measuring Saving Rates in New Zealand: An Update," Treasury Working Paper Series 13/04, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:13/04
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    File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2013/13-04/twp13-04.pdf
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    References listed on IDEAS

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    1. Trinh Le, 2007. "Does New Zealand have a household saving crisis?," Macroeconomics Working Papers 23081, East Asian Bureau of Economic Research.
    2. Phil Briggs, 2012. "Financial accounts and flow of funds," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 26-35, December.
    3. Martin Lettau & Sydney C. Ludvigson, 2004. "Understanding Trend and Cycle in Asset Values: Reevaluating the Wealth Effect on Consumption," American Economic Review, American Economic Association, vol. 94(1), pages 276-299, March.
    4. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    5. Ross Guest & John Bryant & Grant Scobie, 2003. "Population Ageing In New Zealand: Implications for Living Standards and the Optimal Rate of Saving," Treasury Working Paper Series 03/10, New Zealand Treasury.
    6. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    7. Brian McCulloch & Jane Frances, 2001. "Financing New Zealand Superannuation," Treasury Working Paper Series 01/20, New Zealand Treasury.
    8. Tony Makin, 1995. "Inflation distortion of the external accounts: the Australian example," Journal of Economic Studies, Emerald Group Publishing, vol. 22(1), pages 58-65, January.
    9. Khoon Goh, 2005. "Savings and the household balance sheet," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 68, June.
    10. John Gibson & Trinh Le & Grant Scobie, 2004. "Women’s Retirement Incomes in New Zealand: A Household Bargaining Approach," Treasury Working Paper Series 04/22, New Zealand Treasury.
    11. Grant Scobie & Trinh Le & John Gibson, 2007. "Housing in the Household Portfolio and Implications for Retirement Saving: Some Initial Finding from SOFIE," Treasury Working Paper Series 07/04, New Zealand Treasury.
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    1. repec:bla:sajeco:v:85:y:2017:i:2:p:222-241 is not listed on IDEAS

    More about this item

    Keywords

    Savings; measurement; New Zealand;

    JEL classification:

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

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