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Did Household Saving Really Decline in the Reagan Years?

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  • Fred Block

    (Department of Sociology, University of California, Davis)

Abstract

This paper challenges the conventional belief that household saving in the U.S. declined during the Reagan Years. The paper proposes a definition of the household financial surplus that is available for use by corporations and the public sector. It shows how existing measures of household saving diverge from this definition, and it proposes alternative estimates of the trend of this household financial surplus in the 1980s. These alternative estimates show no downward trend, and in most years, the available supply of funds has exceeded business and government demands.

Suggested Citation

  • Fred Block, 1995. "Did Household Saving Really Decline in the Reagan Years?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 27(4), pages 37-55, December.
    • Handle: RePEc:sae:reorpe:v:27:y:1995:i:4:p:37-55
    DOI: 10.1177/048661349502700402
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    References listed on IDEAS

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    1. Robert Pollin, 1993. "Budget Deficits and the US Economy: Considerations in a Heilbronerian Mode," Palgrave Macmillan Books, in: Ron Blackwell & Jaspal Chatha & Edward J. Nell (ed.), Economics as Worldly Philosophy, chapter 5, pages 107-144, Palgrave Macmillan.
    2. Lawrence Summers & Chris Carroll, 1987. "Why Is U.S. National Saving So Low?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 607-642.
    3. Margaret H. Pickering, 1991. "A review of corporate restructuring activity, 1980-90," Staff Studies 161, Board of Governors of the Federal Reserve System (U.S.).
    4. John McNeil & Enrique Lamas, 1989. "Year-Apart Estimates of Household Net Worth from the Survey of Income and Program Participation," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 431-472, National Bureau of Economic Research, Inc.
    5. Thomas Holloway, 1989. "Present NIPA Saving Measures: Their Characteristics and Limitations," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 21-100, National Bureau of Economic Research, Inc.
    6. Fred Block, 1990. "Bad Data Drive Out Good: The Decline of Personal Savings Reexamined," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 13(1), pages 3-19, September.
    7. David F. Bradford, 1990. "What is National Saving?: Alternative Measures in Historical and International Context," NBER Working Papers 3341, National Bureau of Economic Research, Inc.
    8. June Axinn & Mark J. Stern, 1990. "Social Security Policy Reconsidered," Challenge, Taylor & Francis Journals, vol. 33(4), pages 22-27, July.
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