Dissecting saving dynamics : measuring wealth, precautionary, and credit effects

Christopher Carroll, Jiri Slacalek and Martin Sommer

We argue that the U.S. personal saving rate's long stability (from the 1960s through the early 1980s), subsequent steady decline (1980s - 2007), and recent substantial increase (2008 - 2011) can all be interpreted using a parsimonious 'buffer stock' model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between 'target' and actual wealth, with the target wealth determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for

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Year of publication:	2012
Authors:	Carroll, Chris ; Slacalek, Jirka ; Sommer, Martin
Publisher:	Washington, DC : Internat. Monetary Fund
Subject:	Sparen \| Savings \| Privater Konsum \| Private consumption \| Buffer-Stock-Ansatz der Geldnachfrage \| Buffer stock demand for money \| Lohn \| Wages \| Risiko \| Risk \| Liquiditätsbeschränkung \| Liquidity constraint \| USA \| United States \| 1960-2011

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Extent:	Online-Ressource (PDF-Datei: 46 S., 1,597 KB) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 12/219 IMF Working Papers
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	"September 2012 Includes bibliographical references Systemvoraussetzungen: Acrobat Reader Cover; Contents; I. Introduction; Figures; 1. Personal Saving Rate in 2007-2011 and Previous Recessions; II. Theory: Target Wealth and Credit Conditions; 2. Consumption Function (Stable Arm of Phase Diagram); 3. A Wealth Shock; 4. Relaxation of a Natural Borrowing Constraint from 0 to h; 5. Dynamics of the Saving Rate after an Increase in Unemployment Risk; III. Data and Measurement Issues; 6. Net Worth-Disposable Income Ratio; 7. The Credit Easing Accumulated (CEA) Index; 8. Unemployment Risk E[sub(t)]u[sub(t+4)] and Unemployment Rate (Percent); IV. Reduced-Form Saving Regressions A. Baseline Estimates9. The Fit of the Baseline Model and the Time Trend-Actual and Fitted PSR (Percent of Disposable Income); B. Robustness Checks; 10. The Fit of the Baseline Model and the Model with Full Controls (of Table 2)-Actual and Fitted PSR (Percent of Disposable Income); C. Sub-Sample Stability; D. Saving Rate Decompositions; V. Structural Estimation; A. Estimation Procedure; B. Results; 11. Extent of Credit Constraints mt (Fraction of Quarterly Disposable Income); 12. Per Quarter Permanent Unemployment Risk Ω[sub(t)] 13. Fit of the Structural Model-Actual and Fitted PSR (Percent of Disposable Income)14. Decomposition of Fitted PSR (Percent of Disposable Income); VI. Conclusions; 15. Alternative Measures of Credit Availability; 16. Growth of Real Disposable Income (Percent); 17. Personal Saving Rate (Percent of Disposable Income); Tables; 1. Preliminary Saving Regressions and the Time Trend; 2. Additional Saving Regressions I.-Robustness to Explanatory Variables; 3. Additional Saving Regressions II.-Sub-sample Stability; 4. Personal Saving Rate-Actual and Explained Change, 2007-2010 5. Calibration and Structural Estimates6. Preliminary Saving Regressions and the Time Trend-Saving Rate Generated by the Structural Model; 7. Univariate Properties of Disposable Income and Personal Saving Rate; 8. Campbell (1987) Saving for a Rainy Day Regressions; References Electronic reproduction; Available via World Wide Web
ISBN:	978-1-4755-0569-6 ; 978-1-4755-1366-0 ; 978-1-4755-0569-6
Source:	ECONIS - Online Catalogue of the ZBW

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