National and Personal Saving in the United States: Measurement and Analysis of Recent Trends

Abstract

This paper analyzes several issues regarding the measurement of saving and concludes that the observed declines in national, private, and personal saving rates in the United States cannot be attributed to measurement problems. It then examines several factors that seem to have been behind the decline in U.S. personal saving. It suggests that structural changes in capital markets as well as improvements in wealth positions, in the living standards of the elderly, in social security pensions, and in private and public insurance mechanisms all contributed to the declining trend in personal saving. Empirical results suggest that demographic factors may also have played a major role.

JEL Classification: 023, 321