Productivity growth and the U.S. saving rate

Talan Iscan

Economic Modelling, 2011, vol. 28, issue 1, 501-514

Abstract: Over the last half century, the saving rate in the United States exhibited significant variations. In this paper, I examine whether a general equilibrium model that allows for shifts in the growth rate of total factor productivity can account for these variations. The model generates significant medium-run variations in the U.S. saving rate, and establishes a link between episodes of productivity growth slowdowns or accelerations and the saving rate—two concepts that have often been treated in isolation. While a productivity-growth based explanation is able to account for broader trends in the rising consumption–income ratio from about 1980 to 2000, there are other episodes during which the model is less successful.

Keywords: Consumption–income ratio; Saving rate; Productivity growth; United States (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:1:p:501-514

DOI: 10.1016/j.econmod.2010.07.003

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