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This paper examines how households reacted to the dismantling of the one-child policy, which China relaxed in 2013 and eliminated prior to 2017. We use household survey data and a series of regressions to show that birth rates, female labor force participation, and household saving rates have already changed. Between 2015 and 2017, the proportion of households with children having more than one child increased by at least five percentage points. Moreover, within households adding another child, female labor force participation and saving rates significantly decreased. Our paper contributes to the empirical literature on the economic impacts of pro-fertility policies and has implications for the theories of why households save. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic may make people feel that they are likely to die in the near future. This study investigates how COVID-19 influences subjective mortality expectations and savings behaviour. We conducted a questionnaire survey in Japan with 2500 individuals, aged 20–79 years, who were working or whose spouses were working in January 2021. We empirically analysed the effect of an increase in subjective mortality on savings using the questionnaire response data. According to the questionnaire aggregation 33% of the respondents perceived an increase in the possibility of death because of COVID-19. Our empirical results, based on an instrumental variable method that considers the endogeneity of subjective mortality, show that increases in subjective mortality expectations due to COVID-19 have decreased savings. Therefore, the pandemic has decreased individuals' motivation for saving, to a certain extent, owing to their heightened subjective mortality. Moreover, the experience of serious accidents negatively affects savings, whereas that of disasters has no significant effect. [ABSTRACT FROM AUTHOR]

This paper examines the national saving behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with considerable differences in the saving behaviour among countries and over time within individual countries, notwithstanding the 'model saver' image of the region that is based mainly on the experience of high-performing East Asian economies. The empirical analysis distinguishes between private and government saving rates, with specific emphasis on the former. The results of the empirical analysis are consistent with the view of a 'virtuous circle' between growth and saving, with growth initiating the saving transition. No evidence to suggest that a prior phase of promoting saving through specific policy initiatives is needed to initiate the process of growth and structural transformation. The private saving rate is also associated positively with export orientation of the economy, and net foreign capital inflows and negatively with the young dependency ratio of the population and domestic credit availability. [ABSTRACT FROM AUTHOR]

Penny banks were Victorian institutions intended to encourage thrift among working-class people. Initially considered a model of its type, the Birmingham Penny Bank (1850–1865) collapsed because of mismanagement, bad investments, and self-dealing by its lower-middle-class directors. Thousands of depositors, including women and children, lost part of their savings as a result. An investigation followed to apportion blame for the failure. A key question was the level of liability and compensation owed by the bank's elite former officers and trustees, including William Scholefield MP, all of whom had stepped down some thirteen years earlier. Commentators argued that the trustees had betrayed the trust of the depositors by failing to publicise their departure from the supposedly philanthropic institution. In the end, they contributed to the public subscription raised in support of the victims, without admitting liability or experiencing reputational damage. [ABSTRACT FROM AUTHOR]

The dominant interpretation of the classical theories of aggregate activity levels and economic growth is that they are supply-side in nature with the contributions of Sismondi and Malthus viewed as notable exceptions. However, a focused examination of the key texts of the classical economists such as Cantillon, Quesnay, Turgot, Steuart, Smith, and Ricardo reveals that strong demand-side thinking has in fact been lurking beneath the surface in the theoretical world of the classical economists even before Sismondi and Malthus. The major implication is that Say's law is an imposition on classical economists and that in the case of Ricardo, his endorsement of Say's law cannot easily be reconciled with the demand-side ideas in his writing. [ABSTRACT FROM AUTHOR]

We investigate the results of the Israeli pension reform that started at the beginning of 2016. This reform created aged, adjusted pension plans that are aimed to fit better the different age categories and protect the over 60 years old savers from the occurrence of a financial crisis close to their retirement. We find that all the over 60 years old funds have outperformed the financial market according to their preferred level of risk. On the other hand, because the financial market blossomed in recent years, they lost a yearly potential return of 1.64%. The pension tracks for under 50 years old savers have gained an extra of 0.73% return per year; however, not all funds in this age category have outperformed the market benchmarks. The reform did not have a substantial impact on the 50–60 years old track since the risk ingredient has not changed dramatically. [ABSTRACT FROM AUTHOR]

Most of the literature on life cycle investment portfolio analysis focuses on the allocation between risky stocks and safe bonds. We introduce a new risky asset class, cryptocurrency, to a standard consumption-investment life cycle model. Our model suggests that the optimal investment profile in cryptocurrencies declines with age. Young investors mainly invest in cryptocurrency. As age and wealth increase, investors transition to mostly stocks mid-career and mostly bonds in retirement. A welfare analysis shows significant utility losses from not participating in the cryptocurrency market or not adjusting cryptocurrency portfolio shares throughout the life cycle. [ABSTRACT FROM AUTHOR]

Especially for developing countries like Ethiopia, saving is more significant to build capital required to generate income, smooth domestic cash requirements, and allow the ease of consumption during scarcity. However, rural saving at the household level was not substantially investigated in Ethiopia in general and in the study area in particular. The current study, therefore, assessed rural households' saving status and its determinant factors in Gimbo district, south west region of Ethiopia. Out of the entire sample households surveyed, more than half (52.35%) of the surveyed households were non-saver. This is to mean that a lesser proportion of the sampled households were saving their income left from food and non-food spending or other expenses at formal financial institutions. When we look at the intensity of saving, the whole sampled households saved 4,788.15 ETB on average. As both logit and multiple linear regression model results showed, the education level of the household head, distance from financial institutions, farm income, financial literacy, and participation in non-farm activities were found to affect both decision to save and intensity of saving significantly and positively except distance from financial institutions, which is negatively correlated with both. Therefore, to overcome negative effects of distance from financial institutions, the study recommend the expansion of financial institutions up to kebele levels as much as possible. Moreover, policymakers and other concerned bodies responsible for the enhancement of rural private saving should have to amend rural households' farm income, education, financial literacy, and participation in non-farm activities. [ABSTRACT FROM AUTHOR]

This study examines household behavioural responses to the pandemic-induced income shocks regarding their overall spending and spending out of 2020 CARES stimulus payments. Using data from the 2020 Health and Retirement Study COVID-19 project and restricting our sample to older adults (51 years old and above), we show that the negative income shocks experienced during the COVID-19 pandemic put downward pressure on household spending. Results also reveal that, relative to those who did not experience an income shock, stimulus recipients who experienced income losses were more likely to use the stimulus transfer to increase spending, pay off debt, or for other purposes rather than to save. [ABSTRACT FROM AUTHOR]

The authors of this study investigate the likely influence of required or voluntary financial education on the saving behaviors of U.S. adults. They compare the results for three groups defined by different life experiences with financial education (required, voluntary, and none). Probit models estimate the effects of financial education on four saving behaviors: having a savings account; having an emergency fund; saving for investing; and saving for retirement. The results show similar positive outcomes for required and voluntary financial education on each saving behavior. No difference based on self-selection into financial education is evident. The findings also indicate that multiple exposures to financial education in different venues (high school, college, or employment) increase the apparent effects on saving behaviors compared with a single exposure. [ABSTRACT FROM AUTHOR]

We study the impacts of a comprehensive financial inclusion program in a particularly remote, insecure and low-trust setting, lacking bridging institutions to facilitate sustained interventions. We evaluate this program in Wewak district in northwest Papua New Guinea, by randomly assigning treatment to 41 of 79 villages. The program involves a 2-day financial literacy training workshop, timely offers of no-fee bank accounts with reduced administrative hurdles, and savings 'nudges'. We use both survey and bank account administrative data to measure its impact on financial literacy, budgeting and savings behavior, as well as on the ownership and use of bank accounts. Although 25 per cent of adults in treatment villages attended the training and 70 per cent of participants opened a bank account, we do not detect any significant downstream effects. Our results draw into question the benefit of initiatives aiming to 'bank the unbanked' in remote areas, revealing challenges in promoting financial inclusion among the next frontier of underserved and hard-to-reach populations. [ABSTRACT FROM AUTHOR]

This study examines the impact of tax incentives for long-term savings on total private savings using data for Latvia contained in HFCS 2014 and 2017. The survey shows that contributions to tax-favoured savings plans are not associated with lower consumer spending and therefore do not contribute to an increase in private savings. Instead, these savings are achieved by lowering other, non-tax-favoured savings. This substitution effect on non-tax-favoured savings remains statistically significant even when excluding households with very low consumption levels and the ones whose reference person is relatively young/old and with a low level of education. However, the observed effect is not significant at the very bottom of the distribution of non-tax-favoured savings. The results of this study raise concerns that without additional measures to encourage retirement savings, particularly in the lower segment of the savings distribution, income inequality among retirees will continue rising. [ABSTRACT FROM AUTHOR]

Boosting domestic demand is the task of China's sustainable economic development, and in particular, China has become an important global consumer market and the savings patterns should be more cohesive and without discriminations. Using data of China Migrants Dynamic Survey, the paper provides new evidence on internal migrants' savings in China from the perspective of homeownership and family migration. We find that migrants' savings are 5.25–6.60 percentage points higher than hukou population even when controlling for working, social status, and social insurance coverage which means the migrant will save 1019.88–1647.10 yuan in 2010 price more monthly. Furthermore, we discover housing could partly explain the saving gap, while when we take remittance and family migration into account, the saving rate differences between migrants and hukou population disappears, which means migrants may save to consume when they go back to their hometown with their family members instead of consuming later in the resident cities. The research is carried out taking into account the objectives of social cohesion policy identified at national and international level and their involvement in consumption and saving processes. Our empirical results reveal that homeownership, remittance motive and family migration play important roles in shaping saving behaviour of migrants. [ABSTRACT FROM AUTHOR]

Theories of household saving, including the life cycle hypothesis, posit that households add or draw down wealth to equalize the value of consumption over time. This article examines the extent to which late–nineteenth–century, small–town Americans accumulated financial assets consistent with the life cycle hypothesis. Using individual account records from a small–town savings banks, I find that savers accumulated an average of one year's income at age sixty. Decumulation was slower than expected after age sixty. The evidence is inconsistent with a strong bequest motive, so the slow drawing down of wealth in old age may have been due to uncertain mortality risk or wealth–based attrition from the sample. I find differences in the life cycle accumulations between men and women, the native– and foreign–born, and low–skill and high–skill workers. [ABSTRACT FROM AUTHOR]

This study examines the long-run relationship between domestic saving and investment, and assesses the financial globalization of the BRICS economies. The model estimated in one-regime setting with no structural break and in sample-split setting with single as well as multiple structural breaks provides dominant support for the presence of long-run relationship between domestic saving and investment. The slope parameter of saving and implied home-bias in the asset portfolios of investors is generally small to medium for Brazil and large for Russia, India, China, and South Africa (RICS). The small to medium slope coefficient of saving for Brazil suggests the presence of moderate to high international mobility of capital. Financial markets are characterized by financial frictions and there is imperfect integration of RICS with the global financial markets. While the slope coefficient of saving is numerically large for RICS and small to medium for Brazil, it is not strictly identical across estimators. This finding can be generalized to mimic the findings of the extant literature. The academic debates and economic controversies – which surface in almost every area of empirical research – could be ascribed, inter alia, to the use of different methodologies and test statistics across studies. [ABSTRACT FROM AUTHOR]

Using a survey of mostly low-income upperclassmen at a large public institution, we focus on the perspective of young adults regarding financial decision-making during the COVID-19 pandemic. We find that lower-income college students are weathering the pandemic by decreasing discretionary spending and increasing savings. In addition, we find most upperclassmen intend to finish their academic degree in the online learning environment. [ABSTRACT FROM AUTHOR]

This study aims to assess the role of culture as a determinant of financial inclusion, defined with respect to formal account ownership, saving and credit in/from formal financial institutions. A sample of 85 countries, comprising 50 developing and 35 developed countries from the World Bank's Global Findex database is used to perform probit estimations. Hofstede's cultural dimensions, namely power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, short/long-term orientation, and indulgence/restraint are used as culture measures. Our findings indicate that living in high power distance, more masculine, and high uncertainty avoidance cultures reduces the likelihood for financial inclusion. Meanwhile, living in more individualistic, long-term oriented, and more indulgent cultures increases the likelihood for financial inclusion. These findings are relevant for the design of policies to foster financial inclusion across the developing world, especially as financial inclusion affects poverty levels and reduction strategies, and economic development as a whole. We provide evidence which dismisses the global "one size fits all" strategy applied to development-related initiatives like the global provision of funds towards financial inclusion, and argue for a more customised approach given country-level differences conditioned by different cultural frameworks. [ABSTRACT FROM AUTHOR]

Many studies at the macro-level have proved the direct influence of savings and credit on poverty reduction. This study aimed to correct this finding and employed commercial banks as the research case because most poor people had major barriers to directly access services provided by commercial banks. This study revealed that savings did not affect poverty reduction by employing panel data composed from provinces in Indonesia from 2004 to 2018. This finding indicated that the poor people did not prefer commercial banks for saving their money which functions as an instrument for their fund accumulation or emergency savings. On the contrary, this study proved that the credit of commercial banks affected regional poverty. Besides, this study revealed that poverty among regions in Indonesia was heterogeneous. The regions with more developed banking infrastructures do not automatically have a low poverty rate. Therefore, anti-regional poverty policy should focus on commercial bank reinforcement as intermediary institutions and regional aspects. [ABSTRACT FROM AUTHOR]

We develop a two-part high-dimensional Bayesian modelling approach to analyse the relationship between saving behaviour and health. In contrast to the existing literature, our approach allows different data-generating processes for the decision to save and the amount saved, and therefore unveils a more detailed picture of the relationship between financial behaviour and health than previous work. We explore different measures of saving, including monthly saving behaviour and the stock of financial assets held. Further, we exploit British panel data, which includes an extensive range of biomarkers. Our second contribution lies in comparing the effects of these objective measures of health with commonly used self-assessed health measures. We find that health is a significant determinant of saving behaviour and financial asset holding, and that biomarker measures have differential impacts on saving behaviour compared to self-reported health measures. [ABSTRACT FROM AUTHOR]

The paper is providing a unique insight into the increased B2B competition answering the question what are the predictors of the new competitor´s success, using empirical research on large comprehensive real procurement data set, validating and enhancing the qualitative research within the mentioned studies. The research based on the logistic regression and CHAID decision tree showed the following outcomes: (1) competition environment with a successful new competitor does not generate higher competitive pressure and does not bring significant additional savings against the competition with an unsuccessful new competitor; (2) the most crucial factors determining the winning of the new competitor are the number of new competitors with its ratio and transparency of competition. This model reveals the importance of transparency in a competition where a higher transparent environment pushes frequent competitors to more intensive competition leading to their higher success rate. Low transparency in the competition within the B2B supply chain reduces the competitive behaviour of frequent competitors leading to a higher success rate of a new competitor to win the contract. [ABSTRACT FROM AUTHOR]

The riskiness of individuals' saving behaviour affects their old-age wealth and has wider-ranging implications for macroeconomic development and stability. To which extent individuals take financial risks depends on their preferences, which may be moulded by the economic system they live in. I analyse households' financial risk taking after the collapse of the German Democratic Republic. Conditional on their income and financial wealth positions, East German households were more prone to financial risk taking than West German households after reunification. The differences in risk taking were quantitatively relevant shortly after reunification and gradually vanished until 2008. Risk taking of households who were exposed to the socialist system longer was higher. [ABSTRACT FROM AUTHOR]

This article reviews environmentally friendly and/or cost-effective processes. Topics covered are minimum-quantity-lubrication (MQL), cryogenic-cooling and near-dry-machining; polishing slurries; recycled metals; processing wood materials; microfluidic paper devices; life-cycle-assessment; electrical-discharge-machining; friction-stir-processing; and green and/or cost-effective processes. Findings include that environmentally-friendly-slurries are hot research-topics for polishing wafers. For cost, health and environment considerations, MQL emerges as a popular and innovative-research topic. To augment material yield and decrease pollution, solid-state-recycling was conducted to recycle chips. Waterjet turning of wood composites solved the problems of the matrix sticking to machining tools. The performance of wood products is significantly influenced by their surface roughness, which depends on machining processes and anatomical wood structures. Novel approaches were proposed for fast-manufacturing of microfluidic paper devices, with advantages of low energy-consumption and costs. Lifecycle models resulted in indicators under resources, ecosystem quality and human health, and provided the information for further advances of environmentally-friendly processes. Electric discharge machining (EDM) employs hydrocarbons-based dielectrics, and this generates hazardous gas-emission and leads to safety, health and environmental issues. To overcome the problems, innovative green-machining was proposed by conducting sustainable near-dry EDM, which significantly decreased gas-emissions. Copper foam plates were sintered by employing friction stir welding, and the method was cost-effective. [ABSTRACT FROM AUTHOR]

Economic anthropology has long advocated a broader vision of savings than that proposed by economists. This article extends this redefinitional effort by examining ceremonial gifts in India and arguing that they are a specific form of savings. Rural households, including those at the bottom of the pyramid, do save, in the sense of storing, accumulating and circulating value. But this takes place via particular forms of mediation that allow savers to forge or maintain social and emotional relations, to keep control over value – what matters in people's lives – and over spaces and their own future. We propose terming these practices relational and reproductive saving, insofar as their main objective is to sustain life across generations. By contrast, trying to encourage saving via bank mediation may dispossess populations of control over their wealth, their socialisation, their territories and their time. In an increasingly financialised world of evermore aggressive policies to push people into financial inclusion, the social, symbolic, cultural and political aspects of diverse forms of financial mediation deserve our full attention. [ABSTRACT FROM AUTHOR]

Lavoie and Zezza (2020. "A Simple Stock-Flow Consistent Model with Short-Term and Long-Term Debt." Review of Political Economy, forthcoming.) present a stock-flow consistent model which critically refers to a recent work of mine (Sardoni, C. 2019. "Investment and Saving in a Dynamic Context: The Contributions of Athanasios (Tom) Asimakopulos." Review of Political Economy 31 (2): 233–246.) concerned with the complex relation between saving, interest rates, finance and investment. This paper comments on Lavoie's and Zezza's interpretation of Sardoni's position and results and, in turn, presents some critical observations about Lavoie's and Zezza's own model. The focus is on the relation between the marginal propensity to save and the long-term interest rate. [ABSTRACT FROM AUTHOR]

Previous research consistently shows that homeowners accumulate more wealth compared with tenants. In this paper, we describe the size of this 'tenure wealth gap' for 10 European countries. Furthermore, we explain why the size of the tenure wealth gap differs between countries by including cross-level interactions between institutional variables and housing tenure in a series of country-fixed effects regression models. Cross-country differences arise as the costs of owning versus renting, as well as the profitability of homeownership versus other investments, differ along the lines of welfare policies and housing regime arrangements. We attempt to control for selection bias related to tenure status by using propensity score matching techniques, using data from the Household Finance and Consumption Survey (HFCS). Our findings suggest that the tenure wealth gap is largest in familialistic welfare states, in which marginalised tenants are unable to save, whereas homeownership is a family resource that provides an in-kind retirement income ('passive' asset-based welfare). We find smaller tenure wealth gaps in countries with a financialised promotion of homeownership, where housing wealth functions as a privatised welfare arrangement ('active' asset-based welfare). The smallest tenure wealth gaps occur in countries with more affordable rental housing, allowing tenants to accumulate savings. [ABSTRACT FROM AUTHOR]

This study uses the flow of funds accounts framework and undertakes an in-depth analysis of the inter-sectoral mobility of capital in India. Unlike previous studies, the FH model is estimated at the sectoral level using annual data for the period 1950–51 to 2012–13. The model estimated in one-regime setting with no structural break provides a weak and mixed support and that estimated in a sample-split setting with a single structural break provides no support for the presence of a long-run relationship between saving and investment for all the sectors. In contrast, the model estimated with multiple structural breaks provides dominant support for the presence of cointegration between saving and investment for all the sectors. The end-of-sample cointegration breakdown tests suggest the breakdowns of cointegration between saving and investment in all the sub-sample periods for the household and PCB sectors, but not for the public sector. The FOF accounts could be used to monitor the borrowing and lending operations of both financial and non-financial sectors and to identify any deformities in the system. The regulatory and supervisory policies need to be put in place promptly to resolve the identified deformities at their early stages, before they magnify and make the entire system dysfunctional. [ABSTRACT FROM AUTHOR]

This study examines the long-run relationship between domestic saving and investment and undertakes an in-depth account of short-period breaks in the cointegrating vector for 24 OECD countries. The analysis is carried out in a time-series setting to take a country-by-country account of the evidence. The end-of-sample cointegration breakdown tests are performed on both FMOLS and FIML estimates of the model. The cointegrating relationship between domestic saving and investment prevails and the implied intertemporal budget constraint holds for most countries. The cointegration breaks down for some countries during the sub-sample periods. The results are generally consistent across various cointegration breakdown tests. [ABSTRACT FROM AUTHOR]

In the 1980s, Asimakopulos criticized both Kalecki and Keynes for the way they dealt with the problem of the investment multiplier. Kalecki's and Keynes's insufficient attention to the time dimension of the multiplier process led them to overlook some aspects of the relation between saving and investment and underestimate the importance of financing investment, especially with regard to the problem of the conversion of the firms' short-term loans into long-term loans. The paper looks at these problems by carrying out the analysis in a more formal way than Asimakopulos did. In a dynamic analytical context which takes explicit account of the time dimension of processes, the economy's propensity to save can affect investment through its effect on the long-term interest rate. Acknowledging this, however, does not imply the rejection of the view that investment 'comes first': it is not saving that determines investment, but the other way around. [ABSTRACT FROM AUTHOR]

Ramsey's 1928 paper on saving and Hotelling's 1931 article on exhaustible resources are considered to be two seminal contributions in economic dynamics. They have been associated because of their temporal proximity, use of the calculus of variations, and because of Hotelling's citation of Ramsey. This connection however needs to be precisely investigated and characterized. On the basis of archival material, this paper shows that, on the interpersonal and theoretical ground, the connection is quite thin, but that significant parallels are found in Ramsey's and Hotelling's expectations with mathematical economics for the progress of science and for informing public decision. [ABSTRACT FROM AUTHOR]

The finding that homeowners own more non-housing wealth than tenants is well known. We examine whether the higher financial wealth of owners can be partly explained with increases in saving when becoming a homeowner in two distinct institutional contexts. Using longitudinal data for the UK (British Household Panel Survey) and Germany (Socio-Economic Panel Study), we find that homeowners save more and are financially wealthier than tenants. However, when controlling for time-constant selection into homeownership, upon entering homeownership households reduce their probability to save in Germany and reduce their average saving rate in Germany and the UK. For Germany, there is some evidence that processes of homemaking (family formation and home improvement) lead to less saving. For the UK, we find no evidence that increasing home equity over time discourages saving. Finally, tenants do not compensate for their lack of housing wealth by accumulating more non-housing wealth over time. This disadvantage for tenants seems more pronounced in the UK compared to Germany. [ABSTRACT FROM AUTHOR]

This article develops a two-sector growth model in which institutional investors play a significant role. A necessary and sufficient condition is established under which these investors own the entire capital stock in the long run. The dependence of the long-run growth rate on the behaviour of such investors and the effects of a productivity increase are analysed. [ABSTRACT FROM AUTHOR]

This paper provides an evaluation of the performance of KiwiSaver, a subsidised voluntary savings scheme aimed at increasing the retirement wealth of a target population. Four key dimensions of performance are assessed using a variety of empirical techniques drawing on data from a national survey of 825 people conducted in 2010. Results suggest that only one-third of contributions to KiwiSaver represent additional savings. Regression analysis finds no relationship between KiwiSaver membership and expected retirement income outcomes. Examination of standard measures of programme efficacy such as target effectiveness and leakage suggests that KiwiSaver has been only modestly successful in reaching the target population and that leakage to the non-target population was high, at 93%. Finally, the scheme's possible effect on national saving was examined. In the long run, the effect on net national saving appears marginal at best. [ABSTRACT FROM PUBLISHER]

This article contributes to the literature on saving by empirically investigating the determinants of the saving rate in the United States, with a special focus on the role of mortgage debt. Using data from 1987 to 2013, we find that mortgage payments have a substantial negative impact on both personal and private saving rates in the United States. An increase of 10 percentage points in mortgage payments leads to a 9.1-percentage-point drop in the personal saving rate and a 12.4-percentage-point drop in the private saving rate. In addition, including mortgage debt as an explanatory variable leads to significant changes in the impact of other variables, which further reinforces our claim that mortgage debt is important for the analysis of the saving rate. Comparing mortgage payments with nonmortgage consumer debt payments, we find that mortgage payments have a larger impact on the private saving rate whereas nonmortgage consumer debt payments have a larger impact on the personal saving rate. We also find a partial but robust crowding-out effect of public saving rate on the two saving rates. Our results have implications for monetary policy and government policies that encourage mortgage borrowing. [ABSTRACT FROM AUTHOR]

In this article, we use a wavelet-based Granger causality approach to examine the multi-scale causality between saving and growth for China. We show that significant causality runs from saving to growth for most timescales, whereas multi-scale causality from growth to saving is not statistically significant. Our subsample results suggest that economic systems have remarkable effects on the multi-scale causality. Overall, our study provides a novel perspective to deeply explore the relationships between macroeconomic variables. [ABSTRACT FROM PUBLISHER]

This article studies whether 529 plans are an effective way for most people to save for college. The 529 plans were created in 1996 to help low- and middle-income American families save for college. Since this time they have adopted more tax advantages and grown substantially as a result. While total balances in 529 plans now exceed $250 billion, less than 3.0 percent of households have a 529 plan. And the majority of 529 plan accounts are held by the wealthiest households. Low- and middle-income households receive little tax savings from investing in 529 plans, and some states count these plans against financial aid. Also, 529 plans are complicated, rules vary by state, and fund management fees tend to be high. Thus, 529 plans are not the panacea to college affordability. [ABSTRACT FROM PUBLISHER]

Aging populations worldwide, fiscal deficits, growing sovereign debt, and slowing economies have combined to create and exacerbate what is widely known as the “pension crisis”, characterized by poverty among the elderly substantially due to inadequate retirement income. We argue that the roots of the crisis go much deeper than “pensions”, and involve a long-term secular shift from saving and capital formation to consumption, in the West. Cosmetic “solutions” to the pension crisis, such as delaying the retirement age, are ineffective. The “pension crisis” label itself impedes clear thinking about developing an effective and affordable solution. The core of the problem is the fact that present-future choice tilted to “present”, in the West, for decades. Higher saving, over a longer time horizon, invested at higher average returns, is the ultimate goal, and only one that offers true long-term transformative change. We propose an original, radical, systemic solution, based on an evolutionary social transformation1of present-future choice toward increased saving; a proposal that addresses the roots of the pension crisis, not just the symptoms.2We contend that an effective pension allocation and accumulation system is a stable force for economic growth over time — but only when these significant capital investments are made directly in the real economy and take account of appropriate technological innovation. At the moment the bulk of global investment capital in the West is directed to short-term speculative activity in various financial markets, opportunistically taking advantage of historically low borrowing rates. We provide a macroeconomic simulation of our proposal, should it be adopted, comparing no-change and radical-change scenarios for the Israel economy, and urge scholars to carry out similar projections and analyses for individual OECD countries. We next show how an increase in national saving and capital formation can contribute to “rebalancing” the global economy, between low-saving Western nations and high-saving Asian ones. Finally, we outline our “four pillar” radical proposal, which leverages persistent long-run saving and investment, and illustrate its impact with some macroeconomic projections for Israel, comparing two scenarios, one with low national saving, the second with increased national saving. An achievable increase in the national saving rate, implemented through the tax system and accompanied by intelligent capital formation, can have enormous impact, it is shown, not only on elderly poverty but on society as a whole. In our plan, lower consumption demand through higher savings, is offset by higher capital formation, which has a larger employment and GDP multiplier. [ABSTRACT FROM PUBLISHER]

This exploratory study examined ethnic differences in financial outcomes among low-income older Asian immigrants from a financial capability perspective. We used survey data collected from a convenience sample of Chinese, Korean, and “Other Asian” ethnic participants in a subsidized employment program (n = 159). We ran logit regressions of dichotomous financial outcomes. Regression analysis showed significant ethnic differences in some financial outcomes after controlling for financial capability and other factors. Findings did not support our hypothesis that financial capability explains ethnic differences in financial outcomes. Findings suggest the need to develop culturally suitable financial capability measures for future research. [ABSTRACT FROM PUBLISHER]

The article presents a demand-driven model, where the saving rate of households at the bottom of the income distribution becomes the endogenous variable that adjusts for full employment to be maintained over time. An increase in income inequality and the current account deficit and a consolidation of the government budget lead to a decrease in the saving rate of the household sector. Such a process is unsustainable because it leads to an increase in the debt-to-income ratio of the households and its maintenance depends on some kind of asset bubble. This framework allows us to better understand the factors that led to the Great Recession in the United States and the dilemma of the present and the future regarding a repeat of this unsustainable process or secular stagnation. [ABSTRACT FROM PUBLISHER]

The article examines choices of saving and caregiving for informal caregivers who will face uncertainty in health status of elderly parents. The caregivers have a general form of utility with two attributes: wealth and parental health. Informal care will substitute for future need of formal care when parents are in good health. The article first studies the optimal levels of saving and of caregiving and the link between them. Comparative statics results depending on partial risk aversion or correlation attitude are then presented. These results concern the effects of changes in the opportunity cost of caregiving, the share of expected bequest, the health status and the interest rate. The analysis is also extended to investigate the role of cross-prudence/imprudence in wealth when a background health risk is introduced. [ABSTRACT FROM AUTHOR]

The Asian growth miracle is often attributed to factor accumulation under the implicit assumption that savings, broadly defined, have been high and increasing due to exogenous forces. Using data for India, Indonesia, Korea, Singapore and Taiwan over the period 1870–2011 this article examines the causal relationship between growth and saving. The response of growth to savings is first estimated using instruments to generate exogenous variation in savings rates. The residual variation in growth that is not driven by savings is then used as an instrument to estimate the effect of growth on savings. The estimates show that the spectacular saving rates in the Asian miracle economies have been fuelled by growth, and not the other way around. [ABSTRACT FROM AUTHOR]

This paper examines the current account dynamics in a group of ten newly industrialized countries (NICs) during the period 1980–2012 using a panel error-correction model. The model is also used to empirically test whether the degree of capital mobility is positively related to financial openness. The Chin-Ito (2006, 2008) financial openness index is used to classify the countries into different groups, and we place the countries in one group that are similar to each other in terms of their financial openness. Furthermore, to evaluate the extent of capital mobility over the different period from 1980 to 2012, the total period under study is divided into three sub-periods. The estimation results indicate that there exist long-run equilibrium relationships between domestic saving, investment, and current account in all groups regardless of their degree of financial openness. We find that more openness in terms of the capital account is associated with a higher degree of capital mobility in the case of NICs. The empirical result also indicates that the degree of capital mobility is higher in the first and third sub-period. [ABSTRACT FROM PUBLISHER]

This study presents a new database, the Swedish National Wealth Database, which contains annual data on private, public, and national wealth and sectoral saving rates in Sweden over the past two centuries. The paper reviews previous investigations of national wealth, compares their estimates with the ones presented here and discusses method approaches and measurement problems. The main results from data series are presented for assets and liabilities and their subcomponents, for the private and public domestic and foreign sectors. By complementing the past literature with its traditional focus on economic flow variables to understand long-run economic developments, this new database offers potentially new perspectives on a number of important issues in Sweden's economic history. [ABSTRACT FROM PUBLISHER]

In the United States, homeownership is an important part of wealth building, especially for low- and moderate-income people, many of whom are of color. Interestingly, savings products geared towards downpayment are scarce and public support for downpayment is minimal. The current tight credit box, the pending housing finance reform, and the possible elimination of the Mortgage Interest Deduction (MID) will make wealth building through homeownership more challenging in the future. Thus, the author of this paper argues that products geared towards saving for downpayment should be revisited and that downpayment savings policies should be implemented. These products and policies, possibly modeled after the products of building and loan societies (B&Ls), will facilitate access to homeownership, in particular for low- and moderate-income people and people of color. [ABSTRACT FROM AUTHOR]

This article utilizes the empirical findings that age structure of the population affects saving, investment and capital flow and hypothesizes that age structure influences the real exchange rate. Based on this link, an empirical model is specified for Australia and estimated with annual data for the period 1970–2011. An autoregressive distributed lag model of cointegration indicates that Australia's real exchange rate is cointegrated with its productivity differential and the relative share of young dependents (0–14 years) in the population. Long-run estimates show that young cohort has an appreciating influence on the real exchange rate. Also, the short-run adjustment is substantial, with more than 65% of the disequilibrium corrected in a year. [ABSTRACT FROM PUBLISHER]

We estimate the long-term impact of changes in social security and social protection spending on economic performance in the United states. We estimate a VAR model relating GDP, unemployment rates, saving rates and social spending. Our results suggest that social spending has significant distortionary effects in the labour markets as measured by its long-term effects on the unemployment rate, which translate into a detrimental effect on long-term output, this despite a positive, albeit small, effect on the gross savings rate. There are important policy implications of these results. If one considers the systems as they are, any further expansion in their generosity would have detrimental long-term effects. These detrimental effects, however, are neither an indictment of social spending nor evidence against extension of benefits. What they highlight is the need to carefully consider the financing mechanisms currently used and the need to align benefits and contributions in the pension component of social security and the need to find a tax revenue mix that is less distortionary for the unfunded benefits. [ABSTRACT FROM AUTHOR]

This paper evaluates four retirement income policies that could be adopted in response to increasing longevity in terms of their marginal effects on economic performance, equity, and risk. Compared to three alternative save-as-you-go funded retirement income policies (voluntary saving, a prefunded government superannuation scheme, or a supplementary mandatory saving scheme), a pay-as-you-go funded expansion of New Zealand Superannuation has disadvantages for all generations except currently middle-aged people. The other schemes provide different trade-offs between risk, economic growth, and equity. This paper considers arguments for the use of structured savings schemes in addition to New Zealand Superannuation. [ABSTRACT FROM AUTHOR]

Asset accumulation is especially challenging for low- and moderate-income households, which often face fixed costs in their budgets that limit their ability to save. Key fixed costs include expenses associated with housing, such as rent, mortgage, taxes, and utilities. In 2011, 64% of households making $15,000–29,999 were cost-burdened (spent 30% or more of their income on housing). Data were collected in 2007 at two sites using a mixed-methods approach. A sample of 175 households were examined to determine how certain low- and moderate-income households with varying levels of cost burden managed to build savings and why others struggled with the same goal. Households with savings above the sample median of $112 saved an average of $2,304 (with a median of $803). Households with savings below the group's median had an average of $13 in savings, with a median of zero. Barriers to saving experienced by our asset-challenged households include unpredicted shocks, low incomes, unemployment and chronic sickness, large debt, multiple dependents, and prioritizing human capital investments and consumption over saving. Pathways to savings include coresidence, sharing business profits based on need, and financial assistance without obligation of repayment. Other pathways include financial literacy about budgets, savings, and other investments. [ABSTRACT FROM PUBLISHER]

Our purpose is to show that a well-designed Welfare State is a fundamental fiscal policy instrument which allows mending of the main shortcomings of the market mechanism, i.e. lack of Stability, Inequality, disregard of Needs, lack of economic Security: in short, we call them the market's SINS. We show how the family is the main agent for an effective Welfare State, as the firms are for the market. We use detailed data on all the European countries to characterize the different models of welfare within Europe. A cross-section analysis shows that the main goals are better achieved when the social protection benefits focus on the functions of family and children, sickness and health care, because they induce the greatest poverty reduction. We show that for families with children the better working arrangement – which is associated with higher GDP per capita and lower inequality – is one parent working full-time and one parent part-time. We quantify the cross-section variability related to the age structure for the function of pensions. For a sample of seven major European countries we measure the degree of pro-cyclical or countercyclical relationship between social protection expenditures and GDP per capita from 1995 to 2010. In Germany, a Keynesian economic policy in 2009 is associated with a sharp rebound in 2010. We measure the relationship between Welfare State benefits and public budget, given as a constraint. We show a possible relationship between social protection benefits and family savings. [ABSTRACT FROM PUBLISHER]

Panel cointegration methods are used to analyze the saving and investment relationships of the EU member countries; the degree of capital mobility is investigated by pooled mean group estimation. Results demonstrate that although saving and investment move together in the long run, there is also a moderate level of capital mobility in the short run, suggesting that the Feldstein-Horioka puzzle is not valid for these countries in the 1980-2012 period. Results differ in the subsamples of the European Union as the degree of capital mobility is higher in the eurozone countries and early members of the European Union. [ABSTRACT FROM AUTHOR]

In this paper, we present data on recent trends in private consumption and in possible determinants of private consumption (such as GDP, household incomes, household saving rates, household wealth, and employment conditions) in the group of seven (G7) countries and find that there has been significant variability among the G7 countries not only in their private consumption growth rates but also in the determinants of private consumption growth during the 2002–2007 period. With respect to Japan, we find that private consumption has been relatively stagnant during the 2002–2007 period and that the stagnation of private consumption has been due to the stagnation of household income and of household wealth and the relative stability of the household saving rate. [ABSTRACT FROM AUTHOR]