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The Quantitative Consequences of Raising the U.S. Saving Rate

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  • Lewis, Kenneth A
  • Seidman, Laurence S

Abstract

The authors investigate the consequences of a permanent unphased increase in the U.S. gross saving rate. They find that "the sacrifice time"--the time that elapses until consumption surpasses the value it would have had under the initial saving rate--is roughly six years and is insensitive to the percentage increase in the saving rate ([Delta sub s]). The percentage gain in output at the end of decade--" the decade gain"--is roughly 26% of [Delta sub s], while the percentage gain in consumption is roughly 8% of [Delta sub s]. The "saving rate return"--the internal rate of return on a permanent increase in the saving rate--is roughly 16% and is insensitive to [Delta sub s]. Copyright 1991 by MIT Press.

Suggested Citation

  • Lewis, Kenneth A & Seidman, Laurence S, 1991. "The Quantitative Consequences of Raising the U.S. Saving Rate," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 471-479, August.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:3:p:471-79
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    Cited by:

    1. Gapinski, James H., 1996. "Heterogeneous capital, economic growth, and economic development," Journal of Macroeconomics, Elsevier, vol. 18(4), pages 561-585.
    2. Laurence S. Seidman & Kenneth A. Lewis, 1997. "The Design of a Tax Rule for Owner-Occuped Housing Under a Personal Consumption Tax," Public Finance Review, , vol. 25(1), pages 5-24, January.
    3. Gapinski, James H., 2001. "The Panda that grew," China Economic Review, Elsevier, vol. 12(4), pages 263-279.
    4. James H. Gapinski, 1997. "The Growth of Tigers, Elephants, and Other Metaphorical Creatures under Heterogeneous Capital," Southern Economic Journal, John Wiley & Sons, vol. 64(1), pages 147-166, July.

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