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Secular Trends in U.S Saving and Consumption

  • Kaiji Chen

    ()

    (Economics University of Oslo)

  • Ayse Imrohoroglu

    (University of Southern California)

  • Selahattin Imrohoroglu

    (University of Southern California)

National saving rate in the U.S. has been declining since the 1960s while the share of consumption in output has been increasing. We explore if a standard growth model can explain the secular trends observed in this time period. Our results indicate that the standard neoclassical growth model is able to generate saving rates and consumption that are remarkably similar to the data during 1960-2004. Our quantitative findings identify the growth rate of total factor productivity as the main factor generating the secular trends in the behavior of consumption and saving in the U.S

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File URL: http://repec.org/sce2006/up.8847.1141641232.pdf
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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 494.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:494
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