Working Papers in full text
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
All
Other research-related activities and publications of the IMF can be found at IMF Research
|
Free Email Notification
Receive emails when we post new
items of interest to you.
Subscribe or
Modify your profile
|
|
|
|
Frugality: Are We Fretting Too Much? Household Saving and Assets in the United States
|
Author/Editor: |
Abdih, Yasser | Tanner, Evan |
| Authorized for Distribution: |
September 1, 2009 |
|
Electronic Access: |
Free Full Text (PDF file size is 2,113KB)
Use the free Adobe Acrobat Reader to view this PDF file.
|
|
|
|
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
|
|
Summary: Household savings rates in the United States have recently crept up from all-time lows. Some have suggested that a shift toward frugality will hamper GDP growth-the Keynesian "paradox of thrift." We estimate that households compensate for a fall in their asset income by saving more out of their labor income, dollar-for-dollar. In the wake of the crisis, our model predicts that such primary savings will increase, but only temporarily and modestly, as household assets stabilize. As savings flows gradually accumulate, they help rebuild corporate net worth and hence firms' capacity to make capital investments. A timely return to pre-crisis levels of capital investment would require that U.S. households save substantially more than the model predicts, starting now. Hence, we should fret that our savings rates may be too low.
|
|
|
|
Order a print copy
|
|
Series: |
Working Paper No. 09/197 |
|
Subject(s): |
Asset prices | Economic models | Financial crisis | Household credit | Income | Investment | Private investment | Private savings | Private sector | Savings | Time series | United States |
|
Author's keyword(s): |
Saving | net worth | cointegration | transversality | paradox of thrift |
|
|
|
|
| |
Published: |
|
September 1, 2009 |
|
|
|
|
| |
|
|
|
|
Format: |
|
Paper |
| |
Stock No: |
|
WPIEA2009197 |
|
Pages: |
|
51 |
| |
Price: |
|
US$18.00 (Academic Rate: US$18.00 )
|
|
|
|
|
|
|
