Dissecting saving dynamics: measuring wealth, precautionary, and credit effects

We argue that the U.S. personal saving rate’s long stability (1960s–1980s), subsequent steady decline (1980s–2007), and recent substantial rise (2008–2011) can be interpreted using a parsimonious ‘buffer stock’ model of 
We argue that the U.S. personal saving rate’s long stability (1960s–1980s), subsequent steady decline (1980s–2007), and recent substantial rise (2008–2011) can be interpreted using a parsimonious ‘buffer stock’ model of consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between ‘target’ and actual wealth, with the target determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the long-term saving decline, while fluctuations in wealth and uncertainty capture the bulk of the business-cycle variation.
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Metadaten
Author:Christopher D. Carroll, Jiri Slacalek, Martin Sommer
URN:urn:nbn:de:hebis:30:3-272536
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2012,10
Series (Serial Number):CFS working paper series (2012, 10)
Publisher:CFS
Place of publication:Frankfurt, Main
Document Type:Working Paper
Language:English
Year of Completion:2012
Year of first Publication:2012
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2012/10/18
Tag:Consumption; Credit; Saving; Uncertainty; Wealth
Issue:September 16, 2012
Pagenumber:47
HeBIS PPN:348125526
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:E21 Consumption; Saving; Wealth
E32 Business Fluctuations; Cycles
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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