Explaining Japan's Saving Rate

The Japanese Saving Rate

There have been substantial differences between the Japanese and U.S. saving rates in the last 40 years, which have motivated extensive research in this area (see Figure 1). Despite much work, economists have not been able to quantitatively account for the differences in saving rates. In an earlier work, Lawrence J. Christiano (1989) shows that a relatively low initial capital intensity alone i...

Explaining mortality rate plateaus.

We propose a stochastic model of aging to explain deviations from exponential growth in mortality rates commonly observed in empirical studies. Mortality rate plateaus are explained as a generic consequence of considering death in terms of first passage times for processes undergoing a random walk with drift. Simulations of populations with age-dependent distributions of viabilities agree with ...

Is Japan's Saving Rate High

Understanding Japan's Saving Rate: The Reconstruction Hypothesis

Explaining the Rate Spread on Corporate Bonds

The purpose of this article is to explain the spread between rates on corporate and government bonds. We show that expected default accounts for a surprisingly small fraction of the premium in corporate rates over treasuries. While state taxes explain a substantial portion of the difference, the remaining portion of the spread is closely related to the factors that we commonly accept as explain...