A comparison of national saving rates in the UK, US and Italy

Kirsanova, T. and Sefton, J. (2007) A comparison of national saving rates in the UK, US and Italy. European Economic Review, 51(8), pp. 1998-2028. (doi: 10.1016/j.euroecorev.2007.01.005)

Abstract

We develop the approach of Gokhale, Kotlikoff and Sabelhaus [1996. Understanding the postwar decline in US saving: A cohort analysis. Brookings Papers on Economic Activity 0, 315–390], based on the life-cycle model of savings, to decompose the differences in the national saving rates between the UK, US and Italy. Our work suggests that the US saving rate is lower principally because Americans on average retire later. In contrast, the Italian saving rate is higher predominantly because Italians are credit constrained, particularly when young. We also found that demography and the different tax and benefit systems are able to explain little of the cross-sectional differences in saving rates. The study accounts for the possible importance of inter-generational private transfers in determining saving rate

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Kirsanova, Professor Tatiana
• Authors: Kirsanova, T., and Sefton, J.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: European Economic Review
• ISSN: 0014-2921