Savings Rates: Up or Down?

Facundo Piguillem and Ordoñez, Guillermo
Authors registered in the RePEc Author Service: Guillermo L. Ordonez

No 14662, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: It depends what we want to measure. Most literature has focused on observed flow of savings (per-period savings as fraction of GDP), which has declined persistently since 1980. Even though this decline means that fewer funds are available for investment in each period, it does not follow that the households' actual savings (underlying, not observed, savings determined by dynamic optimization) also go down. We theoretically link these two concepts, discuss the conditions under which they move in opposite directions, and show that indeed the actual savings rate has sharply increased since 1980.

Keywords: Savings rates; Capital gains; Human capital (search for similar items in EconPapers)
JEL-codes: E1 E2 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-mac
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