The Saving Rate in Japan: Why it Has Fallen and Why it Will Remain Low

43 Pages Posted: 23 Feb 2007

See all articles by R. Anton Braun

R. Anton Braun

University of Tokyo - Faculty of Economics

Daisuke Ikeda

Bank of Japan

Douglas H. Joines

University of Southern California - Marshall School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: February 2007

Abstract

This paper quantifies the role of alternative shocks in accounting for the recent declines in the Japanese saving rate and provides some projections about its future course. We consider three distinct sources of variation in the saving rate: changes in fertility rates, changes in survival rates, and changes in technology. The empirical relevance of these factors is explored using a computable dynamic OLG model. Our model successfully explains historical variation in the saving rate and other aggregate variables including the after-tax real interest rate, hours per worker and output. Model projections indicate that the Japanese saving rate will be much lower in future years and will not recover to levels of 15 percent that were seen as recently as 1990.

Keywords: Japanese saving rate

Suggested Citation

Braun, R. Anton and Ikeda, Daisuke and Joines, Douglas H., The Saving Rate in Japan: Why it Has Fallen and Why it Will Remain Low (February 2007). Marshall School of Business Working Paper No. FBE 02-07, Available at SSRN: https://ssrn.com/abstract=964777 or http://dx.doi.org/10.2139/ssrn.964777

R. Anton Braun (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

Daisuke Ikeda

Bank of Japan ( email )

2-1-1, Hongoku-cho
Nihonbashi
Chuo-ku, Tokyo, 103-8660
Japan

Douglas H. Joines

University of Southern California - Marshall School of Business ( email )

Hoffman Hall 702 H
Los Angeles, CA 90089
United States
213-740-6510 (Phone)
213-740 6650 (Fax)

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