Financial Deregulation and Household Saving

Bank of England Working Paper No. 5

Posted: 3 Aug 1998

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Date Written: October 1992

Abstract

An overlapping generation model of the effects of financial deregulation is developed. The results indicate that deregulation will produce an exogenous short-run fall in saving, some of which will be recouped over time, while increasing the sensitivity of saving to wealth, current income, real interest rates and demographic factors. Empirical tests using regional saving data for the United Kingdom are reported and found to generally accord with the theoretical model. It is estimated that deregulation caused an autonomous fall of 2?% in the personal saving rate of the United Kingdom over the 1980s.

Suggested Citation

Bayoumi, Tamim, Financial Deregulation and Household Saving (October 1992). Bank of England Working Paper No. 5. Available at SSRN: https://ssrn.com/abstract=112268

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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