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Productivity Growth and the Future of the U.S. Saving Rate

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  • Talan B. Işcan

    (Department of Economics, Dalhousie University)

Abstract

Over the last half century, the saving rate in the United States exhibited significant medium- run variations. In this paper, I examine whether a general equilibrium model that allows for shifts in the rate of total factor productivity growth rate can account for these variations. The model matches the medium-run variations in the U.S. saving rate, and establishes a link between episodes of productivity slowdowns or accelerations and the saving rate—two concepts that have often been treated in isolation. I also use population projections and productivity forecasts to chart the future of the U.S. saving rate. Finally, I consider an extended version of the model, which treats housing as an input into the production of non-market goods, and explore the quantitative influence of housing on the consumption–income ratio.

Suggested Citation

  • Talan B. Işcan, 2008. "Productivity Growth and the Future of the U.S. Saving Rate," Working Papers daleconwp2009-02, Dalhousie University, Department of Economics.
    • Handle: RePEc:dal:wpaper:daleconwp2009-02
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