1 / 23

Changes in measurement of savings: Perspectives from a consumer (of NA data)

Changes in measurement of savings: Perspectives from a consumer (of NA data). Alain de Serres* OECD Florian Pelgrin * Bank of Canada. * Personal views, not to be attributed to the OECD or Bank of Canada. Motivation for adjusting saving rates: cross-section dimension.

holmes-vega
Télécharger la présentation

Changes in measurement of savings: Perspectives from a consumer (of NA data)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Changes in measurement of savings: Perspectives from a consumer (of NA data) Alain de Serres* OECD Florian Pelgrin * Bank of Canada * Personal views, not to be attributed to the OECD or Bank of Canada.

  2. Motivation for adjusting saving rates: cross-section dimension • Direct international comparability of saving levels: cross-sectional dimension • Large cross-country differences in saving rates not fully understood • May reflect institutional rather than differences in behaviour or preferences • May matter for investment, productive capacity, growth

  3. How to deal with the problems in panel data analysis • Use country-specific constant terms to control for cross-country institutional or measurement differences (SFE): • works only if differences remain more or less constant over time • could results in biased estimates and misleading conclusions

  4. Motivation for adjusting saving rates: time series dimension • Properly identify the behavioural response of private agents to changes in economic incentives (relative prices, taxes, income, etc.) • Change in a potential determinant of saving over time may induce shift in measured saving even in absence of behavioural response • re-valuation of financial assets may exaggerate wealth effects

  5. Adjustments discussed / proposed • INSEE paper: • individually identifiable consumption • indirect taxes • pension saving • consumption of fixed capital • consumer durables

  6. Adjustments discussed / proposed • BEA paper: • Defined benefit pension plans • Inflation • Taxation of capital gains • consumer durables

  7. Two complementary sets of adjusted series for US personal saving rates • Study by OFCE on comparison of saving rates between US and France (Baudchon and Chauvin, 1999) • BEA study (Perozek and Reinsdorf, 2002)

  8. Broad motives for household saving • Retirement and bequests (LCH) • Smooth consumption over time (LCH or PIH) • Unexpected loss of income (precautionary) • Financing of large lifetime expenditures (Durables?)

  9. Basic determinants in empirical work • government gross / net saving ratio • net public transfers to households • growth in GDP per capita • old-age dependency ratio • real interest rate • inflation • financial and non-financial wealth

  10. Empirical analysis can be affected by accounting conventions • Capital gains/ losses • induce wealth effect when there is none • boost impact of inflation • affect inter-sectoral allocation of saving

  11. Nature of the problem: • Try to explain movements in broad aggregates on the basis of: • Theory that applies to individual agents • Concepts that can not always be easily matched in National Accounts

  12. Raises a number of issues • How far should one go in aggregation across agents or economic units with heterogeneous characteristics • Increase the risks of inter-sectoral reallocation induced by accounting conventions

  13. Nature of the trade-off • Desirable to raise correspondence between between theoretical concept (or economic unit) and measure... • …but only to the extent that the cost in terms of adding new sources of measurement errors is limited… • …and that adjusted series can be retropolated sufficiently far back to allow for statistical analysis

  14. Overall assessment • Development of a more comparable/ harmonised series of household saving across countries is desirable • Control for main institutional differences • Complement rather than a substitute for current series

  15. Reservations -- Durables • Controlling for consumer durables appear to be trickier with far reaching implications -- sensitivity to assumptions • Not useful if purpose is to assess funds available to expand business capital stock • May be useful to assess models of household behaviour

  16. Reservations -- capital gains • Not useful to add capital gains to income: adds too much noise • Adjustment for taxes paid on capital gains, inflation and DB plan is useful • Better to work on a comparable measure of financial and non-financial wealth

  17. Financial wealth Cumul. saving

  18. Cumul. saving Financial wealth

More Related