Working Paper: NBER ID: w27179
Authors: Guillermo Ordoñez; Facundo Piguillem
Abstract: It depends what we want to measure. Most literature has focused on observed flow of savings (per-period savings as fraction of GDP), which has declined persistently since 1980. Even though this decline means that fewer funds are available for investment in each period, it does not follow that the households’ actual savings (underlying, not observed, savings determined by dynamic optimization) also go down. We theoretically link these two concepts, discuss the conditions under which they move in opposite directions, and show that indeed the actual savings has sharply increased since 1980.
Keywords: savings; saving rates; capital gains; human capital
JEL Codes: E01; E21; G51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| capital gains (H24) | observed savings (E21) |
| increasing human capital (J24) | actual savings (E21) |
| capital gains (H24) | actual savings (E21) |
| increasing human capital (J24) | observed savings (E21) |