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Japanese Saving Rate

Author

Listed:
  • Kaiji Chen

    (University of Southern California)

  • Ayse Imrohoroglu

    (University of Southern California)

  • Selo Imrohoroglu

    (University of Southern California)

Abstract

Japanese and U.S. saving rates have been significantly different over the last forty years. Can a standard growth model explain this difference? The answer is yes. Our results indicate that both an infinite horizon, complete markets setup and an overlapping generations model with incomplete markets are about equally able to generate saving rates that are remarkably similar to the data during 1961-1998. Our quantitative findings identify changes in the growth rate of total factor productivity and the low initial capital stock as the main factors generating the time series behavior of the net national saving rate in Japan. We show that if the Japanese had faced the U.S. TFP and initial conditions, their saving rate would have looked very similar to that of the U.S. households. In other words, it seems that there is nothing peculiar about the Japanese saving behavior.

Suggested Citation

  • Kaiji Chen & Ayse Imrohoroglu & Selo Imrohoroglu, 2005. "Japanese Saving Rate," Macroeconomics 0502017, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpma:0502017
    Note: Type of Document - pdf; pages: 31
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    More about this item

    Keywords

    Neoclassical Growth Model; Saving Behavior; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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