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Japanese Saving Rate

Kaiji Chen (), Ayse Imrohoroglu () and Selo Imrohoroglu
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Selo Imrohoroglu: University of Southern California

Authors registered in the RePEc Author Service: Selahattin Imrohoroglu ()

Macroeconomics from University Library of Munich, Germany

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.

Keywords: Neoclassical Growth Model; Saving Behavior; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-02-07
New Economics Papers: this item is included in nep-dge, nep-mac and nep-sea
Note: Type of Document - pdf; pages: 31
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Journal Article: The Japanese Saving Rate (2006) Downloads
Working Paper: Japanese Saving Rate (2005) Downloads
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