This paper develops and tests a model of Japan’s household savings rate, based on the life-cycle hypothesis that the primary motive for savings is provision for retirement. The paper shows that Japan’s high household savings rate in recent decades reflects the positive influence of rapid...

This paper examines whether financial deregulation in the 1980s has reduced the importance of liquidity constraints in consumption patterns. Data for six industrialized countries are used to estimate a simple model incorporating liquidity constraints and forward looking behavior. It is concluded...

This paper examines the extent to which conclusions of cross-country studies of private savings are robust to allowing for the possible heterogeneity of savings behavior across countries and the inclusion of dynamics. It shows that neglecting heterogeneity and dynamics can lead to misleading...

This paper explores how tax policy affects the level and allocation of national savings in the United States. It argues that the effect of taxes on the overall private saving level is relatively small and uncertain and that raising public saving is the most direct and efficient way to raise...

The U.S. national savings rate has declined in the 1980s, with both public and private components falling. This paper discusses that decline and whether a policy response is needed. The drop in the private savings rate appears to reflect factors not easily reversible by policy and increases in...

This paper examines the relative efficacy of cuts in government spending on goods and services and increases in taxation as tools for augmenting national saving--an issue related to Ricardian equivalence. The theoretical analysis shows little presumption in favor of spending cuts for this...

The 2008 crisis underscored the interconnectedness of the international business cycle, with U.S. shocks leading to the largest global slowdown since the 1930s. We estimate spillover effects across major advanced country regions in a structural VAR (SVAR) using pre-crisis data. Our new method...

This paper presents an econometric model of U.S. current account transactions. The model is used to analyze the factors behind the deterioration in the U.S. external position during the 1980s and to examine the sensitivity of the U.S. current account balance to changes in factors which are its...

This paper considers the demand for various monetary aggregates with a view to assessing their potential roles as intermediate variables for monetary policy. Illustrative estimates using a generalized autoregressive distributed lag model are presented. For M1, the results support an “error...

Trinidad and Tobago is experiencing an energy boom stronger than the ones in 1970s and 1980s. The main fiscal policy challenge is to ensure that the increased revenues from the ultimately exhaustible resources are used in a way that protects the competitiveness of the nonenergy sector, builds...