Household Saving and Asset Valuations in Selected Industrialised Countries

Paul Hiebert
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Paul Hiebert: European Central Bank

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Over the past decade, a fairly synchronised and steady decline in household saving rates has been witnessed in some OECD countries but not in others. In these English-speaking countries, which share many similar institutional and cultural features, declines in household or personal saving appear to have been correlated with large capital gains and rapid financial innovation. An empirical investigation based on quarterly macroeconomic data indicates that gains in the valuation of asset holdings have indeed been important as a substitute for traditional household saving (that is, personal saving as defined in the national accounts) in these countries over the last decades, and in some cases that this effect has been intensifying through time. Existing studies analysing private saving have tended to either focus on individual countries, finding the importance of wealth effects in certain cases, or a panel of OECD countries in which other common factors tend to dominate the wealth effect. In the latter case, it is possible that the lack of a significant wealth effect could be attributable to heterogeneity across countries.

Keywords: household saving; wealth valuation; error-correction (search for similar items in EconPapers)
JEL-codes: C22 E21 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-fmk and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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