Working Paper: NBER ID: w3871
Authors: Albert Ando; Luigi Guiso; Daniele Terlizzese; Daniel Dorsainvil
Abstract: Both young and old consumers appear to dissave too little for their behaviour to be consistent with a strict life cycle model. We concentrate on young households and document their behaviour drawing from Italian and Japanese data. We also provide a theoretical set-up which can account for the observed fact without relying on assumptions about the working of credit markets or the degree of foresight of consumers.
Keywords: saving behavior; life cycle theory; Japan; Italy; young households
JEL Codes: D91; E21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| current income (E25) | saving behavior (D14) |
| future income expectations (J17) | saving behavior (D14) |
| anticipated future income (J17) | current consumption (E20) |
| current consumption (E20) | saving behavior (D14) |
| liquidity constraints (E41) | saving behavior (D14) |
| myopic behavior (E71) | saving behavior (D14) |