Understanding Savings: Evidence from the United States and Japan

Understanding Savings: Evidence from the United States and Japan

by Fumio Hayashi

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Overview

Analysis of consumption and saving decisions by households has always been one of the most active areas of research in economics—and with good reason. Private consumption is the most important component of aggregate demand in a capitalist economy, and explaining consumption is the key element in most macroeconomic forecasting models. To evaluate the effect of government policies invariably requires the knowledge of how they change parameters relevant for household decision making. Understanding Saving collects eleven papers by economist Fumio Hayashi, along with two previously unpublished chapters, for a total of thirteen chapters. The monograph, which brings together Hayashi's empirical research on saving, is divided into three sections. Part I, "Liquidity Constraints", contains five studies that test the well-known implication of the Life Cycle-Permanent Income hypothesis that households shield consumption from income fluctuations. Part II, "Risk-Sharing and Altruism", contains three papers that examine the interactions between related and unrelated households predicted by the hypothesis for the US and Japanese households. The three papers in Part III, "Japanese Saving Behavior", present the author's explanation of the high saving rate in postwar Japan.

Product Details

ISBN-13: 9780262082556
Publisher: MIT Press
Publication date: 07/10/1997
Series: The MIT Press
Pages: 492
Product dimensions: 6.00(w) x 9.00(h) x 1.55(d)
Age Range: 18 Years

About the Author

Fumio Hayashi is Professor in Econometrics at the National Graduate Institute for Policy Studies in Japan.

Table of Contents

Preface ix
I Liquidity Constraints 3(172)
1 Introduction to Parts I and II: A Review of Empirical Studies of Household Saving
3(26)
2 The Permanent Income Hypothesis: Estimation and Testing by Instrumental Variables
29(28)
Addendum to Chapter 2: Estimation Using Updated Data
53(4)
3 The Effect of Liquidity Constraints on Consumption: A Cross-Sectional Analysis
57(24)
4 The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data
81(34)
Addendum to Chapter 4: Consumption Growth Equation for Food
111(4)
5 Testing the Life Cycle--Permanent Income Hypothesis on Japanese Monthly Panel Data
115(26)
6 Tests for Liquidity Constraints: A Critical Survey and Some New Observations
141(34)
II Risk Sharing and Altruism 175(114)
7 Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data
175(34)
8 Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves
209(32)
9 Risk Sharing between and within Families
241(48)
III Japanese Saving Behavior 289(214)
10 Introduction to Part III: A Review of Recent Literature on Japanese Saving
289(42)
11 Why Is Japan's Saving Rate So Apparently High?
331(76)
Addendum to Chapter 11: An Update of Data Appendix
391(16)
12 Life Cycle and Bequest Savings: Evidence from a Large Cross-Section of Japanese Households
407(70)
13 Housing Finance Imperfections and Private Saving: A Simulation Analysis
477(26)
Index 503

What People are Saying About This

From the Publisher

Fumio Hayashi has been a major contributor to the explosion of research on the economics of saving. His consistently creative analysis of the evidence, and particularly of the contrasts between the U. S. and Japan, has advanced our understanding and raised many new puzzles. This book will be indispensible to all researchers in the field.

Angus Deaton , Professor of Economics, Princeton University

Angus Deaton

Fumio Hayashi has been a major contributor to the explosion of research on the economics of saving. His consistently creative analysis of the evidence, and particularly of the contrasts between the U.S. and Japan, has advanced our understanding and raised many new puzzles. This book will be indispensible to all researchers in the field.

Endorsement

Fumio Hayashi has been a major contributor to the explosion of research on the economics of saving. His consistently creative analysis of the evidence, and particularly of the contrasts between the U.S. and Japan, has advanced our understanding and raised many new puzzles. This book will be indispensible to all researchers in the field.

Angus Deaton, Professor of Economics, Princeton University

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