Why the saving rate has been falling in Japan

Azuma, Yoshiaki and Nakao, Takeo (2009): Why the saving rate has been falling in Japan. Published in: Doshisha University World Wide Business Review , Vol. 2, No. 10 (January 2009): pp. 56-65.

Abstract

The paper estimates Japan's household saving rate function for the 1958−1998 period. We find that the contribution of the increase in net financial assets to the fall of the saving rate varies directly with the amount of assets. This has overwhelmed other factors and has caused the saving rate to fall since 1976.

• Item Type: MPRA Paper
• Language: English
• Keywords: Japan's household saving rate; income and financial assets; aging of population; cointegration analysis
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth

References

Banerjee, A., Dolado, J.J., Hendry, D.E., Smith, G.W., 1986. Exploring Equilibrium Relationships in Econometrics through Static Models: Some Monte Carlo Evidence. Oxford Bulletin of Economics and Statistics 48, 253-77

Cigno, A., Rosati, F.C., 1997. Rise and fall of the Japanese saving rate: The role of social security and intra-family transfers. Japan and the World Economy 9, 81-92

Craigwell, R.C., Rock, L.L., 1995. An aggregate consumption function for Canada: a cointegration approach. Applied Economics 27, 239-249

Dickey, D.A., Fuller, W.A., 1979. Distribution of the Estimators for Autoregressive Time Series With a Unit Root. Journal of the American Statistical Association 74, 427-431

Engle, R.F., Granger, C.W.J., 1987. Co-Integration and Error Correction: Representation, Estimation, and Testing. Econometrica 55, 251-276

Flavin, M., 1985. Excess Sensitivity of Consumption to Current Income: Liquidity Constraints or Myopia? The Canadian Journal of Economics / Revue canadienne d'Economique 18, 117-136

Granger, C.W.J., Newbold, P., 1974. Spurious regressions in econometrics. Journal of Econometrics 2, 111-120

Hayashi, F., 1986. Why Is Japan's Saving Rate So Apparently High? NBER Macroeconomics Annual 1, 147-210

Hayashi, F., 1992. Explaining Japan's Saving: A Review of Recent Literature. Monetary and Economic Studies (Bank of Japan) 10, 63-78

Hayashi, F., 1997. Understanding Saving: Evidence from the U.S. and Japan. MIT Press.

Hendry, D.F., 1986. Econometric Modelling with Cointegrated Variables: An Overview. Oxford Bulletin of Economics and Statistics 48, 201-12

Horioka, C.Y., 1992. Future trends in Japan's saving rate and the implications thereof for Japan's external imbalance. Japan and the World Economy 3, 307-330

Horioka, C.Y., 1996. Capital Gains in Japan: Their Magnitude and Impact on Consumption. The Economic Journal 106, 560-577

Horioka, C.Y., 1997. A Cointegration Analysis of the Impact of the Age Structure of the Population on the Household Saving Rate in Japan. The Review of Economics and Statistics 79, 511-516

Johansen, S., 1988. Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control 12, 231-254

Johansen, S., Juselius, K., 1990. Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics 52, 169-210

Nickell, S., 1985. Error Correction, Partial Adjustment and All That: An Expository Note. Oxford Bulletin of Economics and Statistics 47, 119-29

Pantula, S.G., Gonzalez-Farias, G., Fuller, W.A., 1994. A Comparison of Unit-Root Test Criteria. Journal of Business & Economic Statistics 12, 449-459

Phillips, P.C.B., Perron, P., 1988. Testing for a unit root in time series regression. Biometrika 75, 335-346

Salmon, M., 1982. Error Correction Mechanisms. The Economic Journal 92, 615-629

Sargan, J.D., Bhargava, A., 1983. Testing Residuals from Least Squares Regression for Being Generated by the Gaussian Random Walk. Econometrica 51, 153-174