Saving and Interest Rates in Japan: Why They Have Fallen and Why They Will Remain Low

R. Braun, Daisuke Ikeda and Douglas H. Joines
Additional contact information
Douglas H. Joines: Marshall School of Business, University of Southern California

No CARF-F-028, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: This paper quantifies the role of alternative shocks in accounting for the recent declines in Japanese saving rates and interest rates and provides some projections about their future course. We consider four distinct sources of variation in saving rates and real interest rates: changes in fertility rates, changes in survival rates, changes in technology and changes in uninsurable labor income risk. The emprical relevance of these factors is explored using a computable dynamic OLG model. We find that the combined effects of demographics and slower total factor productivity growth successfully explain both the levels and the magnitudes of the declines in the saving rate and the after-tax real interest rate during the 1990s. Model simulations indicate that the Japanese savings puzzle is over.

Pages: 39 pages
Date: 2005-03
References: View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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https://www.carf.e.u-tokyo.ac.jp/old/pdf/workingpaper/fseries/39.pdf (application/pdf)

Related works:
Journal Article: Saving and interest rates in Japan: Why they have fallen and why they will remain low (2006)
Working Paper: Saving and interest rates in Japan: why they have fallen and why they will remain low (2006)
Working Paper: Saving and Interest Rates in Japan:Why They Have Fallen and Why They Will Remain Low (2005)
Working Paper: Saving and Interest Rates in Japan: Why They Have Fallen and Why They Will Remain Low (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cfi:fseres:cf028

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