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Precautionary Savings in the Great Recession / Ashoka Mody, Damiano Sandri, Franziska Ohnsorge.
- Format:
- Book
- Government document
- Author/Creator:
- Mody, Ashoka.
- Series:
- IMF Working Papers; Working Paper ; No. 2012/042
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Saving and investment--Econometric models.
- Saving and investment.
- Global Financial Crisis, 2008-2009--Econometric models.
- Global Financial Crisis, 2008-2009.
- Physical Description:
- 1 online resource (39 p.)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2012.
- Language Note:
- English
- 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.
- Contents:
- Cover; Contents; I. Introduction; Figures; Figure 1. Consensus forecasts for 2009 real GDP growth; Figure 2. Change in real private consumption growth and household saving rates, 2007-09; II. A Model of Precautionary Savings; Figure 3. Higher unemployment risk increases the saving rate; Figure 4. The saving rate is little influenced by changes in investment risk; Figure 5. The saving rate increases after wealth losses; III. Econometric Approach; IV. Savings and Uncertainty; Tables; Table 1. Saving rates and unemployment risk
- Figure 6. Change in estimated standard deviation of real per capita GDP growth, 2008-09Table 2. Other measures of uncertainty; V. Other Determinants of Savings; Table 3. Wealth effects; Table 4. Additional control variables; VI. Global Factors; Table 5. Robustness checks; VII. The Great Recession; Table 6: Global variables; Figure 7. Actual and fitted household saving rate; Figure 8. Change in actual and fitted saving rate, 2007-09; Figure 9. Contribution to predicted change in the saving rate between 2007 and 2009; VIII. Conclusions; Figure 10. News reference volume in Google searches
- ReferencesData Appendix; Data Definitions and Sources
- Notes:
- Description based upon print version of record.
- Includes bibliographical references.
- Description based on online resource; title from PDF title page (ebrary, viewed June 16, 2014).
- ISBN:
- 9781463942984
- 1463942982
- 9781463942380
- 1463942389
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