Determinants of Japanese Household Saving Behavior in the Low-Interest Rate Environment

26 Pages Posted: 16 Mar 2021

See all articles by Sophia Latsos

Sophia Latsos

University of Leipzig

Gunther Schnabl

University of Leipzig - Institute for Economic Policy

Date Written: 2021

Abstract

This paper scrutinizes the role of prolonged, expansionary monetary policy on the savings behavior of Japanese households, focusing on the dramatic change of the household savings rate since 1998, from high to low savings. The literature generally attributes this change to the country’s shift from high-growth to low-growth and its demographic change. This paper empirically examines changes in the incentives for saving and the ability to save connected to monetary policy. It finds that monetary policy had a significant impact on Japan’s household behavior via the interest rate channel and the redistribution channel but not the labor income channel. There is also evidence that rising wealth boosts savings.

JEL Classification: E210, E430, E520

Suggested Citation

Latsos, Sophia and Schnabl, Gunther, Determinants of Japanese Household Saving Behavior in the Low-Interest Rate Environment (2021). CESifo Working Paper No. 8927, Available at SSRN: https://ssrn.com/abstract=3804531 or http://dx.doi.org/10.2139/ssrn.3804531

Sophia Latsos (Contact Author)

University of Leipzig ( email )

Institute for Economic Policy
Grimmaische Straße 12
D-04109 Leipzig, 04109
Germany

HOME PAGE: http://www.wifa.uni-leipzig.de/iwp/

Gunther Schnabl

University of Leipzig - Institute for Economic Policy ( email )

Institute for Economic Policy
Grimmaische Straße 12
Leipzig, 04109
Germany

HOME PAGE: http://www.wifa.uni-leipzig.de/iwp/

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