Declining Savings: What Influenced Household Savings Rate in China?

Income uncertainty and household savings in China

China’s urban household saving rate has increased markedly since the mid-1990s and the agesaving profile has become U-shaped. To understand these patterns, we analyze a panel of urban Chinese households over the period 1989-2009. We document a sharp increase in income uncertainty, largely due to an increase in transitory variance (the variance in household income attributed to transitory idiosy...

Savings and Growth in China

China saves an extraordinary share of its GDP; moreover, this share has been growing steadily over the last two decades. More puzzling, however, is the persistence of this savings behavior in the face of the high rate of growth of the economy – a rate that shows no sign of abating. A standard neoclassical model would not predict such a relationship between the two variables, and would in fact p...

Household Savings in Developing Countries: An Annotated Reading List

No . 632 WHY DID JAPAN ’ S HOUSEHOLD SAVINGS RATE FALL IN THE 1990 S ?

This paper investigates empirically why Japan’s household savings rate fell in the 1990s. We constructed an economic model consisting of two types of household: unconstrained life-cycle households and liquidity-constrained households. Unconstrained households generally save, but liquidity-constrained households consume all of their disposable income. We found that the proportion of liquidity-co...

Savings, investment, and capital mobility within China☆

Article history: Received 26 February 2009 Received in revised form 6 August 2009 Accepted 26 August 2009 This paper addresses the capital mobility among regions within China. Using a range of panel estimators which deals with the non-stationarity of time series components, individual heterogeneity and common unobserved factors, we show that the savings and investment (both expressed as ratios ...