Hi Bryan,
There are at least two official government savings rates. My guess is that you
are referring to the individual savings rate from the National Income and Product
Accounts. For a very good description of how it is computed and its advantages and
shortcomings see Gale and Sabelhaus in the 1999:1 BPEA.
Whatever you may think about NIPA savings measures they are not "silly." They do
a pretty good job of measuring the national income concept of savings which is not
identical with change in wealth. It is a useful concept since in NIPA savings flows
equal investment and if household savings is negative it has to be offset by
government saving or international savings if there is to be any investment.
Gale and Sabelhaus do not answer the question that you ask but they do look at
the question of whether savings rates are low if we define savings as change in wealth
rather than income minus consumption. They conclude that were (at least at the time of
the article) extremely high.
I wouldn't be surprised if some of the same problems that Gale and Sabelhaus
address wouldn't be behind some of the results you mention from the literature on
individual savings rates. - - Bill Dickens
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
E-MAIL: [EMAIL PROTECTED]
AOL IM: wtdickens
>>> [EMAIL PROTECTED] 08/08/02 02:25PM >>>
Bill Dickens wrote:
>
> Bryan:
> Which "official definition of savings" are you referring? NBER or
> Palgrave's Dictionary of Economics? Both emphasize looking at savings as
> abstinence of consumption. Do you reject the Wicksell-Fisher tradition that
> savings is a reflection about how individuals discount the future?
I am thinking about officially-reported "savings rates," which in recent
years have sparked puzzlement by actually turning negative. I'm not
sure whose imprimatur is on these numbers. But the savings experts I've
had the chance to ask have told me that official numbers don't count
stock purchases, capital gains, etc.
But maybe I'm just confused. If anyone knows better...
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"He wrote a letter, but did not post it because he felt that no one
would have understood what he wanted to say, and besides it was not
necessary that anyone but himself should understand it."
Leo Tolstoy, *The Cossacks*
