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Productivity growth and the U.S. saving rate

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  • İşcan, Talan B.

Abstract

Over the last half century, the saving rate in the United States exhibited significant variations. In this paper, I examine whether a general equilibrium model that allows for shifts in the growth rate of total factor productivity can account for these variations. The model generates significant medium-run variations in the U.S. saving rate, and establishes a link between episodes of productivity growth slowdowns or accelerations and the saving rate—two concepts that have often been treated in isolation. While a productivity-growth based explanation is able to account for broader trends in the rising consumption–income ratio from about 1980 to 2000, there are other episodes during which the model is less successful.

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  • İşcan, Talan B., 2011. "Productivity growth and the U.S. saving rate," Economic Modelling, Elsevier, vol. 28(1), pages 501-514.
    • Handle: RePEc:eee:ecmode:v:28:y:2011:i:1:p:501-514
    DOI: 10.1016/j.econmod.2010.07.003
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    1. Giusto, Andrea & İşcan, Talan B., 2019. "Market Power And The Aggregate Saving Rate," Macroeconomic Dynamics, Cambridge University Press, vol. 23(6), pages 2269-2297, September.
    2. Steven D. Silver, 2015. "Human capital in personal consumption and labour force productivity: evidence from an OECD panel," Applied Economics Letters, Taylor & Francis Journals, vol. 22(7), pages 529-538, May.

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    More about this item

    Keywords

    Consumption–income ratio; Saving rate; Productivity growth; United States;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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