Franklin

Precautionary Savings in the Great Recession [electronic resource] Mody, Ashoka.

Author/Creator:
Mody, Ashoka.
Publication:
Washington, D.C. : International Monetary Fund, 2012.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 12/42.
IMF Working Papers; Working Paper No. 12/42
Format/Description:
Government document
Book
1 online resource (38 p.)
Local subjects:
Aggregate demand. (search)
Business cycles. (search)
Business Fluctuations. (search)
Consumer durables. (search)
Consumption behavior. (search)
Consumption decisions. (search)
Consumption function. (search)
Consumption growth. (search)
Consumption habits. (search)
Contraction in consumption. (search)
Current Account Adjustments. (search)
Cycles. (search)
Developed countries. (search)
Disposable income. (search)
Domestic production. (search)
Economic growth. (search)
Economic Growth of Open Economies. (search)
Economic models. (search)
Economic recession. (search)
Future consumption. (search)
General equilibrium. (search)
Household income. (search)
Household wealth. (search)
Income growth. (search)
Keynes. (search)
Keynesian. (search)
Labor demand. (search)
Labor income. (search)
Low unemployment. (search)
Permanent income. (search)
Permanent income hypothesis. (search)
Personal consumption. (search)
Post-Keynesian. (search)
Private consumption. (search)
Rate of return on saving. (search)
Short-Term Capital Movements. (search)
Total household wealth. (search)
Unemployment. (search)
Unemployment insurance. (search)
Unemployment rate. (search)
Unemployment risk. (search)
Australia. (search)
Austria. (search)
Belgium. (search)
Canada. (search)
Denmark. (search)
Finland. (search)
France. (search)
Germany. (search)
Ireland. (search)
Italy. (search)
Japan. (search)
Netherlands. (search)
Portugal. (search)
Spain. (search)
Switzerland. (search)
Summary:
Heightened uncertainty since the onset of the Great Recession has materially increased saving rates, contributing to lower consumption and GDP growth. Consistent with a model of precautionary savings in the face of uncertainty, we find for a panel of advanced economies that greater labor income uncertainty is significantly associated with higher household savings. These results are robust to controlling for other determinants of saving rates, including wealth-to-income ratios, the government fiscal balance, demographics, credit conditions, and global growth and financial stress. Our estimates imply that at least two-fifths of the sharp increase in household saving rates between 2007 and 2009 can be attributed to the precautionary savings motive.
Notes:
Description based on print version record.
Contributor:
Mody, Ashoka.
Ohnsorge, Franziska.
Sandri, Damiano.
Other format:
Print Version:
ISBN:
1463936435:
9781463936433
ISSN:
1018-5941
Publisher Number:
10.5089/9781463936433.001
Access Restriction:
Restricted for use by site license.
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