Download or read book Precautionary Saving of Chinese and U S Households written by Horag Choi and published by . This book was released on 2014 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We employ a model of precautionary saving to study why household saving rates are so high in China and so low in the US. The use of recursive preferences gives a convenient decomposition of saving into precautionary and non precautionary components. This decomposition indicates that over 80 percent of China's saving rate and nearly all of the US saving arises from the precautionary motive. The difference in the income growth rate between China and the US is vastly more important for explaining saving rate differences than differences in income risk. We estimate the preference parameters and find that Chinese and US households are more similar in their attitude toward risk than in their intertemporal substitutability of consumption.

Download or read book Income Uncertainty and Household Savings in China written by Mr.Marcos Chamon and published by International Monetary Fund. This book was released on 2010-12-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-profile of savings.

Download or read book China s Consumption Driven Growth Path written by Alexandra Küttel and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A key policy question that China is facing is how to rebalance economic growth away from export/investment dependency to a consumption-driven growth path. It is a widespread believe that the main culprit of reduced private consumption as share of GDP is the rising household saving rate. It is often claimed that saving rates have remained so high due to precautionary savings by households caused by the lack of a well-functioning social security system. In order to implement adequate policies to increase household consumption, it is essential to know what drives Chinese household saving. This thesis conducts a panel analysis of the determinants of the household saving rate across Chinese provinces for the 2000-2010 period. The main findings are the presence of very strong saving inertia across urban and rural households and mixed effects of most other variables on urban and rural households. No evidence is found for precautionary saving driven by the lack of adequate social security.

Download or read book A Comparison of Household Saving Motives Between Chinese and Americans written by Feifei Wang and published by . This book was released on 2010 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main purpose of this study is to compare the household saving motives between Chinese and Americans. The two datasets used in this study are from the 2008 Survey of Chinese Consumer Finance and Investor Education and the 2007 Survey of Consumer Finances in the United States. The likelihood of reporting precautionary saving motive, education saving motive, and retirement saving motive was tested by logistic regression analysis. This study concluded that Chinese households were more likely to report the precautionary and education saving motives, when compared with American households. In terms of the retirement saving motive, only Chinese households placed in the first and second household income groups were more likely to perceive the retirement saving motive than their counterpart Americans. There was no difference in perceiving the retirement motive between Chinese and Americans for all the other household groups. The stronger motivation to save for Chinese than for Americans serves as a good explanation for the higher saving rates in China than in the United States. Policy makers and financial planners can use the findings to target particular population who are less motivated to save, and to help them realize the importance of saving and conduct necessary saving behaviors.

Download or read book Dissecting Saving Dynamics written by Mr.Christopher Carroll and published by International Monetary Fund. This book was released on 2012-09-01 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We argue that the U.S. personal saving rate’s long stability (from the 1960s through the early 1980s), subsequent steady decline (1980s - 2007), and recent substantial increase (2008 - 2011) can all be interpreted using a parsimonious ‘buffer stock’ model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between ‘target’ and actual wealth, with the target wealth determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the saving rate’s long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business-cycle variation.

Download or read book China s High Savings Drivers Prospects and Policies written by Ms.Longmei Zhang and published by International Monetary Fund. This book was released on 2018-12-11 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s high national savings rate—one of the highest in the world—is at the heart of its external/internal imbalances. High savings finance elevated investment when held domestically, or lead to large external imbalances when they flow abroad. Today, high savings mostly emanate from the household sector, resulting from demographic changes induced by the one-child policy and the transformation of the social safety net and job security that occured during the transition from planned to market economy. Housing reform and rising income inequality also contribute to higher savings. Moving forward, demographic changes will put downward pressure on savings. Policy efforts in strengthening the social safety net and reducing income inequality are also needed to reduce savings further and boost consumption.

Download or read book Capitalizing China written by Joseph P. H. Fan and published by University of Chicago Press. This book was released on 2013 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: La 4e de couverture indique : "Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. The chapters in this volume examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries."

Download or read book Precautionary Motive Income Inequality and the Urban Household Saving Rate in China written by Sichuang Xu and published by . This book was released on 2015 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Public Expenditures on Social Programs and Household Consumption in China written by Mr.David Coady and published by International Monetary Fund. This book was released on 2010-03-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 11⁄4 percentage points of GDP.

Download or read book Unemployment Consumption Smoothing and Precautionary Saving in Urban China written by Xin Meng and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The permanent income hypothesis and life-cycle models allowing for precautionary saving suggest that households may be able to smooth their consumption by saving during normal periods or when facing high income uncertainties and dissaving when adverse economic shocks occur. These hypotheses are tested using a unique data set collected from China. Our findings indicate that Chinese urban households are capable of smoothing most consumption and have a strong motive for precautionary saving. However, we find strong evidence of an inability to smooth educational expenditure suggesting educational subsidies may be necessary to prevent further increases in income inequality in the next generation.

Download or read book Precautionary Savings Behavior of Chinese Farm Households During Institutional Transition in the 1990s written by Heping Cao and published by . This book was released on 2001 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Beyond Our Means written by Sheldon Garon and published by Princeton University Press. This book was released on 2012 with total page 495 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Garon's insightful and provocative new book couldn't be more important, and couldn't be more timely. The prosperity of Americans, and America, now depends on creating a nation of savers and investors, and Garon shows us the way by bringing the experience and lessons of nations worldwide right into our hands."--Ray Boshara, senior fellow, "New America Foundation."

Download or read book Why are Saving Rates of Urban Households in China Rising written by Marcos Chamon and published by . This book was released on 2014 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to about one quarter of disposable income. We use household-level data to explain why households are postponing consumption despite rapid income growth. Tracing cohorts over time indicates a virtual absence of consumption smoothing over the life cycle. Saving rates have increased across all demographic groups although the age profile of savings has an unusual pattern in recent years, with younger and older households having relatively high saving rates. We argue that these patterns are best explained by the rising private burden of expenditures on housing, education, and health care. These effects and precautionary motives may have been amplified by financial underdevelopment, as reflected in constraints on borrowing against future income and low returns on financial assets.

Download or read book Income Uncertainty and Household Savings in China written by Marcos Chamon and published by . This book was released on 2015 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: China's household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped during the 2000s. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-saving profile.

Download or read book Understanding High Saving Rate in China written by Xinhua He and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a detailed analysis of the Chinese saving rate based on the flow of funds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintaining a high saving rate in China, is misleading because this conclusion is drawn from the household survey data. In fact, the household saving rate has declined dramatically since the mid-1990s, as is observed from the flow of funds framework. The high national saving rate is attributed to the increasing shares of both government and corporation disposable incomes. Insufficient consumption demand is caused by the persistent decrease in percentage share of household to national disposable income. Government-directed income redistribution urgently needs to be improved to accelerate consumption, which in turn would make the Chinese economy less investment-led and help to reduce the current account surplus.

Download or read book Household Saving Motives written by Rui Yao and published by . This book was released on 2016 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the 2008 Survey of Chinese Consumer Finance and Investor Education and the 2007 Survey of Consumer Finances, this study compared saving motives between Chinese and American urban households. Results showed that, compared with their American counterparts, Chinese households were more likely to report precautionary and education saving motives; and Chinese households with lower incomes were more likely to report a retirement saving motive. Chinese households' stronger motivation to save serves as an explanation of the greater saving rates in China, compared to the United States. The results have implications for policy makers, financial professionals and consumer finance researchers.

Download or read book The Role of Household Saving in the Economic Rise of China written by Steven Lugauer and published by . This book was released on 2013 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: The saving rate in China is high by historical and international norms. The high saving rate has funded capital accumulation which in turn has been the primary driver of China's economic growth. We review the evidence on Chinese household saving and conduct a small study to assess the importance of the precautionary motive for saving.